Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

CITY OF LONDON (VARIOUS POWERS) BILL [Lords]

As amended, considered; to be read the Third time.

PETITION

Stansted Airport

Sir D. Walker-Smith: Mr. Speaker, I beg to present a Petition from the Urban District Council of Bishop's Stortford in the County of Hertford.
The Petition recites the intention of the Government to site the third London airport at Stansted and to confer planning permission therefor by special development order.
It further recites the many and grave problems that will flow therefrom in the context of regional planning and the public interest generally.
It concludes:
Your Petitioner prays that Her Majesty's Government may be called upon to examine its national policy for airports and to cause a further public inquiry to be held into the suitability of Stansted and other alternative sites for the Third London Airport and to refrain from making any Special Development Order for the development of the airport at Stansted until a final decision can be taken in the light of the findings of such inquiry.
And your Petitioner, as in duty bound, will ever pray.

To lie upon the Table.

Oral Answers to Questions — COMMONWEALTH AFFAIRS

Rhodesia

Mr. Judd: asked the Secretary of State for Commonwealth Affairs whether he will make a statement on the latest position in Rhodesia.

The Secretary of State for Commonwealth Affairs (Mr. George Thomson): I have as yet nothing to add to the statement which I made on 14th November.

Mr. Judd: Would not my right hon. Friend agree that in view of the cost of the present sanctions policy in the context of our present economic situation, and in view of the rapidly deteriorating situation in Rhodesia as reflected in the pernicious racialist legislation introduced there now, there is urgent need to make the sanctions policy more effective? And is he aware that he will have all possible support in this House for anything he does in that respect?

Mr. Thomson: Her Majesty's Government are with great urgency studying all aspects of the problem in the light of the report I brought back from Salisbury.

Mr. Doughty: In view of the vast cost of sanctions—whether or not the figures given to me by the Prime Minister last week are right, and whatever may be the rights and wrongs of this policy—is it not time, in view of our financial situation, that we stopped imposing on ourselves the vast cost of these sanctions?

Mr. Thomson: We are aware of the sacrifices that the British economy is making as a result of sanctions. I think that, simply on the economic front, one has to bear in mind that if we were to depart from the principles laid down there would be a very considerable economic cost on the other side.

Mr. Paget: Is the Minister aware that reinforcing failure is generally bad generalship, and that if our economic policy is to succeed it involves an increase of at least £200 million in our South African trade, and that we shall certainly not get it while we persist in this foolishness?

Mr. Thomson: Is my hon. and learned Friend aware that I recognise the source, in today's Daily Telegraph, of his phrase "reinforcing failure"? Is he further aware that to depart from principles is very often bad politics?

Sir G. Nabarro: Is the Secretary of State not aware that, in their 25th month, sanctions are now totally abortive, most largely because none of our foreign competitors observe them? Why is he continuing to give trade to the Japanese, to the French, to the Italians, and the remainder, as the expense of Britain?

Mr. Thomson: The hon. Gentleman is either ignorant of or is ignoring the operations of the sanctions resolution. There are further Questions on the Order Paper which I do not want to anticipate, but I certainly do not accept the hon. Gentleman's view that sanctions are not having an effect in Rhodesia.

Mr. Faulds: Will not my right hon. Friend agree that, if we are talking of economic considerations, military intervention would be a damned sight cheaper than the prolongation of sanctions?

Mr. Thomson: No, Sir. I do not agree.

Dr. Gray: asked the Secretary of Stae for Commonwealth Affairs what plans he has for imposing further restrictions on individual Southern Rhodesians to bring home to them the illegal nature of the Smith régime.

Mr. George Thomson: Means of making the sanctions policy more effective are constantly under review. The Commonwealth Sanctions Committee set up a Working Party on 28th September for this purpose. I cannot forecast at this stage what further measures Her Majesty's Government may take.

Dr. Gray: Is it not strange that the individual citizens of an illegal régime are able to visit this country without let or hindrance? Will not my right hon. Friend consider stopping such travel unless it is made on compassionate grounds?

Mr. Thomson: Travel is one of the matters that is under study by the Working Party of the Commonwealth Sanctions Committee. I do not want to prejudge the decisions that that body

may come to on where the balance of advantage lies, nor when the decision is taken could I undertake in advance to tell the House about it, because the effectiveness of sanctions lies in their surprise value.

Mr. Braine: Does the Secretary of State recall telling the House when he came back from Salisbury that he was not seeking to slam the door but was interested in making progress and that both sides had agreed to reflect on the situation before taking further steps? Would he not agree that at a time when, if I may quote the Daily Telegraph— [HON. MEMBERS: "No."]

Mr. Speaker: The hon. Gentleman may not quote at Question Time.

Mr. Braine: Would not the Secretary of State agree that at a time when the deadlock is bleeding both countries suggestions such as that made in the Question are most unhelpful and seem calculated to destroy the possibility of a settlement?

Mr. Thomson: No, I really cannot accept that the position is as the hon. Member has stated it. We are at present considering my report as a result of my discussions in Salisbury and in other African capitals. Sanctions are already in operation as a result of U.N. resolutions and the Commonwealth Sanctions Committee had been considering this matter for some months before I ever set off to Africa. One cannot expect these considerations to be held up indefinitely. We have got to keep the two things in step, but I will make a statement to the House on these matters as soon as I can.

Mr. David Steel: Further to the original question, cannot we at least withdraw recognising the validity of Rhodesian passports.

Mr. Thomson: I have answered that question. This is being considered by the Commonwealth Sanctions Committee, and I do not want to prejudge the Committee's decision.

Mr. Biffen: asked the Secretary of State for Commonwealth Affairs what evidence he has of the increasing effect of sanctions in producing economic and political changes within Rhodesia.

Mr. George Thomson: While sanctions have not yet led to a situation in which there is a return to constitutional rule, I am satisfied that they are having a significant effect on Rhodesia.

Mr.Biffen: That Answer reflects more hope than realism. Is it the right hon. Gentleman's proposition that the political strength of Mr. Ian Smith within Rhodesia has been diminished since the onset of sanctions?

Mr. Thomson: I should not like to make an estimate on that question, and I have been doing my best directly with Mr. Ian Smith in recent weeks to see whether we can come to an honourable and just settlement. The hon. Gentleman asks about the effect of sanctions. There is no doubt about the effect they are having on the Rhodesian economy. I take only one figure at random: Rhodesia's export earnings fell by well over one-third in the first year after the I.D.I.

Mr. Raphael Tuck: Is it not about time this stalemate was ended, not by removing sanctions and thereby condoning what Mr. Ian Smith has done but by firmer and stricter measures against Rhodesia?

Mr. Thomson: There are several stalemates in various parts of the world which I, as an overseas Minister, would very much like to see resolved. But we can only struggle on to try to bring about a settlement in accordance with the principles in which we believe.

European Economic Community

Mr. Judd: asked the Secretary of State for Commonwealth Affairs whether he will make a statement on the latest discussions between Her Majesty's Government and the Governments of developed and developing countries within the Commonwealth on the present position of Great Britain in relationship to the European Economic Community.

The Under-Secretary of State for Commonwealth Affairs (Mr. William Whitlock): Since we formally presented our application for membership of the European Economic Community on 11th May, consultations have been held in London at ministerial or official level with representatives of New Zealand; Australia; India; Commonwealth coun-

tries in the Caribbean; Commonwealth sugar-producing countries; Canada; and Hong Kong. We have also held consultations through our High Commissioners in Rawalpindi and Singapore with Pakistan and Singapore officials.

Mr. Judd: Would not my hon. Friend agree that, whether it is justified or not, the image is increasingly one of Britain wanting to enter the Common Market at any price and this is giving ground for widespread concern in the Commonwealth, particularly in developing countries? Is there not an urgent need for round-table consultations, particularly on problems of the newer Commonwealth countries?

Mr. Whitlock: I do not agree with my hon. Friend. We have said that we will safeguard essential Commonwealth interests in our negotiations with the Six, and that we intend to do.

Sir C. Osborne: How can the Govern-men safeguard the interests of developing countries when in the last three years the terms of trade have turned 6 per cent. in our favour and given us £300 million a year at the expense of those developing countries? Is not this the sort of aid they want? Why not give it to them?

Mr. Whitlock: We are giving a great deal of aid to developing countries and this is a matter on which there is a great deal of consultation internationally at the moment.

Mr. Rose: Will my hon. Friend say how many Commonwealth countries have already applied for association with the E.E.C. under the Treaty of Yaounde and how many have indicated that they will do so if Britain enters the Common Market?

Mr. Whitlock: Those which have not already done so will think of doing so in the light of discussions we may have with the Six.

Mr. Macdonald: asked the Secretary of State for Commonwealth Affairs if he will now give an assurance that consultation with the sugar-producing countries of the Commonwealth will take place before negotiations to enter the European communities reach a conclusion on the matter of sugar imports to this country.

Mr. Whitlock: Yes Sir. We intend to maintain the fullest measure of consultation with all Commonwealth Governments, including those of sugar-producing countries, both before and during negotiations.

Mr. Macdonald: If I may assume for the purposes of this question that meaningful negotiations are still possible, may we infer from that reply that a permanent solution satisfactory to the sugar-producing countries is an essential pre-condition to be reached before entering?

Mr. Whitlock: We have said that we will attempt to negotiate such an agreement, and in the negotiations which will take place round this we shall maintain full consultation with the sugar-producing countries.

Mr. Allason: Have not the Government indicated that they accept the terms of the Treaty of Rome in full, even if it breaches the Commonwealth Sugar Agreement?

Mr. Whitlock: No, Sir. We have made it quite clear to the Six that we intend to try to safeguard essential Commonwealth interests, and that quite clearly includes the interests of the countries which produce sugar within the Commonwealth.

Nigeria

Mr. Tilney: asked the Secretary of State for Commonwealth Affairs what action he has taken to safeguard British interests resulting from the civil war in Nigeria.

Mr. George Thomson: I would refer the hon. Member to what I told the House on 24th October. British interests, like Nigerian interests, will best be served by the early restoration of peace in Nigeria.—[Vol. 751, c. 1486–7.]

Mr. Tilney: Will the right hon. Gentleman accept that we and the Commonwealth, because of our historic links with Nigeria, and also our big material interests there, have a responsibility to help the O.A.U. or any mission to achieve some solution to this awful civil war, which is likely to ruin Nigeria?

Mr. Thomson: Yes, I accept that and I assure the hon. Member that Her Majesty's Government are doing every-

thing they can to help the O.A.U. or anyone else who has a contribution to make to bringing people from the battlefield to the conference table.

Mr. John Lee: Would my right hon. Friend agree to a peace mission headed by himself to go to Nigeria?

Mr. Thomson: I should like to consider that suggestion very carefully. Every effort is being made at the moment to try to bring peace in this civil war in Nigeria. I think the House will understand that in the special circumstances of any civil war, and particularly this one, perhaps the most effective efforts are made behind the scenes.

Mr. Braine: In that connection, can the right hon. Gentleman say whether there have been any consultations thus far with the O.A.U.? Do the Government contemplate having any consultations with the O.A.U.?

Mr. Thomson: The O.A.U. mission finally arrived in Lagos a few days ago. A distinguished member of the mission is head of State of Ghana, General Ankrah. We are in touch with General Ankrah about the possibilities.

Dr. David Kerr: asked the Secretary of State for Commonwealth Affairs what requests he has had for help in ensuring an equitable and peaceful settlement in Nigeria; and what reply he has sent.

Mr. Barnes: asked the Secretary of State for Commonwealth Affairs what requests he has now received to assist in promoting peace talks between the Federal Government of Nigeria and Biafra.

Mr. Booth: asked the Secretary of State for Commonwealth Affairs what requests he has received for assistance from the Federal Government of Nigeria or the Biafran authorities to provide auspices for talks to end the fighting in that area; and what reply he has sent.

Mr. George Thomson: The answer to each Question is "None, Sir".

Dr. Kerr: Is my right hon. Friend aware of the concern felt in this country for the possible fate of the Ibo people, and is he aware, also, of the growing concern for many Nigerians, on both


sides in the civil war, who are in this country and experiencing mounting difficulties? Is it not possible for him to take an initiative himself in order to resolve the conflict there and restore the Nigerian economy?

Mr. Thomson: I am aware of the concern on both sides of the House about the sufferings of all sections of the Nigerian people. As I said in answer to an earlier Question, we are daily seeking any practicable means of promoting a peace settlement, but this can be best done privately rather than publicly at this stage.

Mr. Barnes: Does not my right hon. Friend agree that we are unlikely to be asked to intervene in this affair because of the loss of face involved for the side making the request? But is not Britain in a unique position to take an initiative herself to try to end the present stalemate?

Mr. Thomson: I think that Britain is in a unique position, but it cuts both ways. We have a unique position of influence with, I believe, all sections of the Nigerian people because of our past association, but there are also special difficulties associated with any public initiative by Her Majesty's Government because we are, after all, the former colonial Power. I sometimes think that many people who are deeply concerned—I recognise their sincerity—about what is happening in Nigeria still feel that we are living in an imperialist age when Britain can order these things about much more than is, in fact, the case.

Mr. Booth: As the Federal Government cannot come to talks based upon a prior granting of the right of secession to Biafra, will my right hon. Friend offer to arrange talks without this prior condition being made, realising that the first priority must be to stop the fighting in Nigeria?

Mr. Thomson: Certainly, our priority is to try to contribute in any way we can to the stopping of the fighting, but I ask my hon. Friend to appreciate that, in common with every other country in the world, we recognise the Federal Government as the Government of the whole of Nigeria, and it follows from that that we cannot do anything which would recognise the fragmentation of Nigeria.

Zambia (Mr. Simbule)

Sir Knox Cunningham: asked the Secretary of State for Commonwealth Affairs what reply has been received from the Government of Zambia to the request made by Her Majesty's Government for clarification of further derogatory remarks made by Mr. Simbule, while acting as High Commissioner, on 12th and 13th August in London and Nairobi, respectively; and if he will make a statement.

Mr. George Thomson: I have nothing to add to my reply to the hon. Members for Oswestry (Mr. Biffen) and Blackpool, South (Mr. Blaker) on 24th October.

Sir Knox Cunningham: Why this delay? Is it not a simple matter, if the reports are wrong, for the High Commissioner to deny them and add that he confirms his original apology? If they are right, is it not quite intolerable that a High Commissioner of the United Kingdom should insult a country to which he has been appointed? When are we to have a new one?

Mr. Thomson: I ought in frankness to tell the hon. Member that I have no reason to believe that the reports themselves were inaccurate. I repeat to the House that the gentleman concerned has not been back in this country as a resident since he made the remarks now complained of. The best way to get results is to leave the matter to be resolved through diplomatic channels, although I am aware that I am testing the patience of the House on this.

Anguilla and St. Kitts

Sir J. Rodgers: asked the Secretary of State for Commonwealth Affairs if he is yet in a position to make a further statement on the relationship between Anguilla and St. Kitts.

Mr. Marten: asked the Secretary of State for Commonwealth Affairs if he will make a statement on the latest situation in St. Kitts.

Mr. George Thomson: Anguilla is part of the unitary State of St. Christopher-Nevis-Anguilla. Responsibility for the internal government of this associated State, including the arrangements for the administration of its constituent parts,


lies with the State authorities and not with Her Majesty's Government.

Sir J. Rodgers: Is the Secretary of State aware that five men were acquitted on a trumped-up charge of trying to overthrow the Government, that Mr. Bradshaw rushed through an emergency meeting of the Assembly and passed a resolution of no confidence in the island's administration of justice? Is he further aware that the Chief Justice of the Caribbean Association of States accused the St. Kitts Government of contempt of court, prejudicing fair trial, and impeaching the trial judge? Is it any wonder that Anguilla does not wish to be associated with St. Kitts at this moment?

Mr. Thomson: Yes, I am aware of all the very serious matters the hon. Member has just described. They do not, however, come within the responsibility of Her Majesty's Government. What we are seeking to do to assist in this matter is sending out a small all-party Parliamentary delegation which I think owes something to the hon. Members encouragement and inspiration. That small delegation has now reached the Caribbean and the right thing to do at the moment is to give it a chance of getting down to work.

Mr. Marten: Nevertheless, as St. Kitts is an associated State, have the Government made a statement on this really disgusting treatment of the judges—a moral protest even—to the Government of St. Kitts? When the mission returns, will the Government consider the question of associating, perhaps in some temporary way, Anguilla with the British Virgin Islands?

Mr. Thomson: I think the right thing to do is to allow the Parliamentary delegation to get there and to see what it can do on the ground and then to come back to report to the House.

Mr. Turton: As a British subject was released by order of the Government and then rearrested and deported, surely the right hon. Gentleman has a responsibility? Could not the Parliamentary delegation going into Anguilla discuss with the Prime Minister of St. Kitts matters affecting this country and British subjects?

Mr. Thomson: I am sure the right hon. Gentleman can rely on the Parliamentary delegation to discuss all these matters, including matters which are causing concern in this country. In regard to the personal case of the gentleman who has just been mentioned, I understand that he has started legal proceedings so it would be improper for me to comment on the merits of that.

Hong Kong

Mr. Colin Jackson: asked the Secretary of State for Commonwealth Affairs if he will make a statement on the present position in Hong Kong and the task of maintaining peaceful conditions there.

Mr. George Thomson: So far as the internal situation is concerned, there is little change from the reply given by my hon. Friend, the Minister of State, on 6th November to my right hon. Friend the Member for Easington (Mr. Shinwell).
Border exchanges between Hong Kong Government officials and the local Chinese border authorities were concluded on 25th November. As my statement is rather long, I will circulate it in the OFFICIAL REPORT.

Mr. Jackson: Can the Secretary of State assure the House that further cases of kidnapping on the Chinese frontier in the new territories are not likely to occur? Can he tell us whether Communist activities in Hong Kong are separated from the designs and policies of the Government in Peking?

Mr. Thomson: I should not like to commit myself to any prophecy about the future course of events in Hong Kong. I am very happy that the exchanges I have mentioned have resulted in the return to Hong Kong of the two police constables who had been abducted and, as the House knows, the police inspector had earlier made his escape. On the second Question I think events inside Hong Kong, although always a reflection of events on the mainland of China, are not necessarily bound up with them.

Sir F. Bennett: Can the right hon. Gentleman confirm that, while the stormy conditions continue in Hong Kong and on the borders, there will be no question


of a rundown of our forces, either current or proposed, in the basic garrisons of Hong Kong?

Mr. Thomson: We shall do everything necessary to give support to the Hong Kong Government in maintenance of law and order and security.

Mr. Rankin: Is my right hon. Friend aware that the Bill just passed meant to keep order in Hong Kong contains a Clause borrowed from the Constitution of Southern Rhodesia which we regard as having an illegal Government?

Mr. Thomson: I am not aware of the particular details my hon. Friend has mentioned, but I think he has a detailed Question on that matter on the Order Paper.

Mr. A. Royle: Will the right hon. Gentleman say something about the economic situation in Hong Kong? What has been the effect on prices as a result of the recent devaluation and revaluation of the Hong Kong dollar?

Mr. Thomson: As the House knows the Hong Kong Government first devalued entirely in line with Her Majesty's Government, and, after seeing which other countries had decided to devalue, they took the decision to revalue the currency by 10 per cent. This resulted in a net devaluation in Hong Kong of 5·7 per cent. All the evidence so far is that the response to devaluation in Hong Kong, like the response to the emergency over recent months, has been a very positive one and a good one. There is no sign of business confidence being affected.

Following is the Statement:
The exchanges were confined to local frontier issues and agreement was reached on the return to British territory of two Hong Kong policemen who had been in Chinese hands for several weeks; the deportation to China of five persons arrested for offences committed in British territory; the opening of the border bridge at Man Kam To; the relocation of a wire fence which had been erected by the Hong Kong authorities in 1962 for immigration purposes; the making of payments of about £5,000 by the British side to offset losses to certain farmers from Chinese territory resulting from the closure of the Man Kam To Bridge and damage caused to certain graves by the construction of military works in British territory.
The British side made it clear that they accepted no blame for the closure of Man Kam To Bridge. They also made it clear that

any persons from Chinese territory who worked land on the Hong Kong side were free to cross the frontier to engage in farming and other activities provided that they behaved in a normal orderly manner.

Mr. Frank Allaun: asked the Secretary of State for Commonwealth Affairs if, when the phased reduction takes place in maximum working hours for women and young persons employed in the garment and other industries in Hong Kong, he will take steps to avoid a reduction in their weekly earnings by an increase in wage rates.

Mr. Whitlock: The reduction of maximum hours of work for women and young persons has been phased over five stages primarily for the purpose of avoiding a serious reduction in total earnings, in that it provides time for adjustment. The temporary permitted increase of overtime will further assist in the process of adjustment.

Mr. Allaun: Will my hon. Friend greatly strengthen his Labour Department in Hong Kong so as to overcome the almost absolute power of the employers and to ensure that the reduction below 60 hours a week does not result in a reduction in the present appallingly low wages?

Mr. Whitlock: The Commissioner of Labour in Hong Kong, speaking in the Legislative Council, has already offered the Government's help and guidance to labour and management alike in carrying out the changes. My hon. Friend may rest assured that this will be closely watched. He will be aware that the overall wages paid in Hong Kong are higher than in most Asian countries. They have more than doubled in the past nine years and more than kept pace with the increase in the cost of living in that time. There is every prospect that there will be a steady upward trend in the level of wages.

Mr. Fletcher-Cooke: Does the Minister realise that anything which increases the costs of Hong Kong will greatly please my constituents, but that at the same time, if he overloads the costs in Hong Kong, only Korea, Taiwan and Japan can benefit?

Mr. Whitlock: I am aware of those difficulties.

Gibraltar

Mr. Colin Jackson: asked the Secretary of State for Commonwealth Affairs if he will make a statement on recent plans by Her Majesty's Government for constitutional progress in Gibraltar.

Sir F. Bennett: asked the Secretary of State for Commonwealth Affairs on what date a constitutional conference on Gibraltar's political future relationship with the United Kingdom will be held; what will be its terms of reference; on what basis the composition of Gibraltar's representatives at such a conference will be arranged; and whether constitutional advisers to the various Gibraltar representational groups or individuals will be permitted.

Sir W. Teeling: asked the Secretary of State for Commonwealth Affairs whether he has yet decided if the Indian Merchants' Association and Indian community generally in Gibraltar will be represented at the forthcoming talks on the Gibraltar Constitution.

Mr. George Thomson: As already announced, we expect to start discussions about the constitution early in the new year. I am still in consultation with the Governor about procedure, and am not yet in a position to add to the replies I gave to various hon. Members on 23rd, 24th and 25th October.—[Vol. 751, c. 373, 1480, 1481 and 514.]

Mr. Jackson: I thank my right hon. Friend for that reply. Is he aware that there has been very considerable dissatisfaction in Gibraltar because it was announced that Her Majesty's Government wished to have talks with the Spanish Government directly after the overwhelming vote in the referendum and before it was decided to have talks between the people of Gibraltar and the British Government?

Mr. Thomson: Yes, Sir; I am aware that some Gibraltarians have expressed this concern. I should have thought that the actions taken by Her Majesty's Government, first in promoting the referendum as a very special case in colonial administration, and secondly in the very robust position we have taken up at the United Nations on behalf of Gibraltar, would have completely reassured the

people of Gibraltar that in any talks that take place with the Government of Spain their interests will be fully safeguarded.

Sir F. Bennett: Will the Secretary of State bear in mind the need to make a definite statement soon about the date when these constitutional talks will be held? This announcement was promised before 10th September, and, as the hon. Member for Brighouse and Spenborough (Mr. Colin Jackson) has said, since then it has been found possible to make an announcement about Anglo-Spanish talks which apparently will not preclude the political future of the Rock? Can he at least give a definite assurance today that these talks will not cover the political future of the Rock at least until the talks with Gibraltar directly have taken place?

Mr. Thomson: I think that the nature of the proposed talks with Spain, which have now been postponed by the Spanish Government until the new year, has been made plain on a number of occasions by my right hon. Friend the Foreign Secretary. I am aware of the impatience in the House about the need to get ahead with the constitutional discussions in Gibraltar, which are my responsibility. The Chief Minister of Gibraltar and one of his senior colleagues are at present in New York at the United Nations representing the interests of Gibraltar there. This is one reason for a certain amount of delay. I hope to be able to announce further details shortly when my consultations with the Governor are completed.

Sir W. Teeling: Does the right hon. Gentleman remember that I asked him about the Indian question many weeks ago and he said that he would look into it? Does he realise that the Indians were not allowed to vote in the Gibraltar referendum and they are getting very worried about what their position is? Can he not give some clue as to what he feels about their position now?

Mr. Thomson: I am aware that the hon. Gentleman has raised this matter with me before. I am sorry that my consultations with the Governor are not complete on this aspect, as on other procedural aspects of the forthcoming discussion.

Mr. Thorpe: Would it not be better to defer the talks with Spain until after


the constitutional talks? Is the Secretary of State aware that the people of Gibraltar, who have been under blockade for the past two years, are very concerned that the British Government, in their handling of the passport issue, of the air space issue, and of the currency regulations matter, have been wet and weak towards a Fascist régime which is threatening very loyal British subjects?

Mr. Thomson: I cannot accept that for a moment. Her Majesty's Government have just completed the very exceptional process of holding a referendum in Gibraltar in order to show Spain and the rest of the world exactly where the people of Gibraltar feel that their true interests lie. The House can be assured that Her Majesty's Government will continue to represent these true interests.

Sir W. Teeling: asked the Secretary of State for Commonwealth Affairs what approaches have been made to him by the Gibraltar Government, or other representative ye bodies in Gibraltar, to remove from Gibraltarians those restrictions on immigration which are placed on them by the Commonwealth Immigrants Act; and how many Gibraltarians, on an average, apply each year to enter the United Kingdom to work.

Mr. George Thomson: Representations have been received on several occasions from Gibraltar Ministers and from the Integration with Britain Party in favour of either the amendment of the Commonwealth Immigrants Act or alteration of the administrative procedure thereunder so as to reduce or remove difficulties over the immigration of Gibraltarians to Britain.
The answer to the second part of the Question is 50.

Sir W. Teeling: Does not the right hon. Gentleman realise that the place is only about the size of Hyde Park and that from its people, as Sir Joshua Hassan tells me, at the most only about 200 apply to come here in any one year? Is not the right hon. Gentleman aware that, on the other hand, there were 10,000 applications last year from Spain, Gibraltar's next-door neighbour, and just under 10,000 of these applications were agreed to, whereas only 57 Gibraltarians asked to come—I think that is the figure—and only 19 applications were granted?

Ought not something to be done for our own people?

Mr. Thomson: I feel great sympathy for the position of the Gibraltarians in this matter, and I recognise that we face not so much a large-scale desire for immigration into this country as a deep sense of claustrophobia. We are carefully examining the whole question at the moment. I have the personal difficulty that I must represent the interests of a number of dependent territories as well as of independent Commonwealth countries to Her Majesty's Government and there are difficulties about singling out any one territory. But I understand the general question and shall do my best.

Zambia (Deported British Subjects)

Mr. Baker: asked the Secretary of State for Commonwealth Affairs what progress he has to report on his representations to the Zambian Government for compensation to British subjects who have been deported from Zambia.

Mr. George Thomson: Our High Commissioner in Lusaka has forwarded claims from seven United Kingdom citizens to the Zambian authorities, and is awaiting their reply. He will continue to press the matter.

Mr. Baker: Is it not a scandal that a so-called friendly Commonwealth country can behave in this manner without giving any reasons whatever for its action? Will the Secretary of State consider withholding part at least of the generous grant Her Majesty's Government make to Zambia in order that a certain amount of compensation may be paid to those who have suffered?

Mr. Thomson: Her Majesty's Government, as I think the hon. Gentleman knows, have supported these claims on behalf of British citizens because we consider that the claimants were illegally ordered to leave Zambia at unacceptably short notice. The amounts of the claims are a private matter for the claimants. We will certainly do everything we can to support their claims. I never think that it is wise to link directly these individual cases with the general question of the provision of aid to another country.

Australia (Trade)

Mr. Farr: asked the Secretary of State for Commonwealth Affairs what estimate has been given to him by the Australian Government of the expected annual decline in our export trade to Australia as a result of the United Kingdom joining the Common Market.

Mr. Whitlock: All our discussions with the Australian Government about our application for membership of the E.E.C. are confidential and I cannot, therefore, enter into details.

Mr. Farr: I am not very grateful for that reply. Is the hon. Gentleman aware that all the newspapers carried a full and detailed report of the Paper which the Australian Minister for Trade submitted to Her Majesty's Government in the spring of this year, which indicated that it would cost this country in lost export trade to Australia £160 million per annum? Will the hon. Gentleman confirm that figure and, in that event, say whether he feels that it is altogether too high a price to pay?

Mr. Whitlock: I do not wish to be drawn into public discussion of satements made by Ministers of other Commonwealth Governments. Obviously, any figures must be largely a matter of speculation, but I should be very surprised if our exports to Australia fell by as much as the figure mentioned by the hon. Gentleman.

Mr. Shinwell: If the Government intend to abandon the Commonwealth, why not do it in a decent and straightforward fashion instead of by the method of making futile application to join the Common Market?

Mr. Whitlock: We are not abandoning the Commonwealth, and the reasons for our application to join the E.E.C. are well understood in Commonwealth countries.

Mr. Braine: Does not the hon. Gentleman realise that all of us, on both sides of the House, greatly value our traditional ties with Australia? What positive steps are the Government taking, or proposing to take, to promote greater trade and investment in Australia's expanding

markets, irrespective of whether we go into the Common Market or not?

Mr. Whitlock: Every effort is being made to expand our trade with Australia. Obviously, our exports to Australia are a valuable part of our export trade, and every attempt is being made to increase them.

British Honduras

Sir F. Bennett: asked the Secretary of State for Commonwealth Affairs whether he will now announce the date of a referendum in British Honduras to enable the inhabitants freely to decide their own political future.

Mr. Chichester-Clark: asked the Secretary of State for Commonwealth Affairs whether he will make a statement on the constitutional future of British Honduras.

Mr. George Thomson: The position on constitutional development remains as stated by my hon. Friend the then Under-Secretary of State for the Colonies in the Adjournment debate on 12th August, 1966.—[Vol. 733, c. 2056.]
The political future of British Honduras is not in dispute locally and there is no occasion to consider a referendum on that point. As regards the dispute with Guatemala, we have undertaken that the wishes of British Honduras will be consulted when the mediator has presented his proposals. We shall then ask the Government of British Honduras how they wish this consultation to be carried out.

Sir F. Bennett: Will the right hon. Gentleman today confirm the universality of his dedication to the principles of self-determination by reaffirming positively that the wishes of the people of British Honduras will be respected when this question does arise, as consultation by itself is not of decisive importance to this House?

Mr. Thomson: Yes, Sir, the wishes of British Honduras, after consultations have taken place, will be respected by Her Majesty's Government.

Mr. Chichester-Clark: Leaving aside the question whether there ought to be mediation at all, will the right hon. Gentleman say that it is the people as distinct from the Government of British


Honduras whose wishes will be consulted and that their worries about the possibility of a sell-out to Guatemala will be dissipated as fast as possible?

Mr. Thomson: The form of consultation is something one would need to look at at the time it takes place; but British Honduras, in common with other dependent British territories, has a democratically elected Government and it is appropriate, therefore, that consultation in the first instance should be through that Government.

Mr. Henig: Is my right hon. Friend giving the House an absolute assurance that, in the event of any arrangements whatever being made which give Guatemala any rights and powers over British Honduras policy in any field there will first be consultation with all parties and all opinions in British Honduras?

Mr. Thomson: My hon. Friends asks a wide range of hypothetical questions. I repeat to him Her Majesty's Government's position, that the wishes of British Honduras will be consulted when the mediator presents his proposals.

Mr. Braine: Is not the right hon. Gentleman seized of the deep anxiety felt on both sides of the House? He refers to the wishes of British Honduras or to the Government there when he talks of consultations. Is he not seized of the desire on both sides to be assured that the people of this territory will be consulted about their future?

Mr. Thomson: Yes, Sir, I understand that; but I imagine that the hon. Gentleman would greatly resent it if, in any community in which he was an elected representative, the Government of that community were by-passed. Surely, the democratic Government of a community is the right avenue for making arrangements for consultation.

Developing Countries (Agreements)

Mr. Tilney: asked the Secretary of State for Commonwealth Affairs what requests he has received from developing countries of the Commonwealth to vary agreements made on their achieving independence.

Mr. Whitlock: The agreements to which the hon. Member refers could be of

a number of kinds and may have been concluded many years ago. I therefore hesitate to give a categorical answer, but if the hon. Member will let me know what type of agreement or particular country he has in mind I will make further inquiries.

Mr. Tilney: Since various agreements covering public servants have been the responsibility of the Minister's predecessors, is he aware of the excessive income tax claim by the Government of Ceylon, the non-payment of pensions by the eastern region of Nigeria, and the claim of the Government of Tanzania for the British Government to be responsible for the pensions of Her Majesty's overseas civil servants? Will he consider taking on that responsibility and reducing aid accordingly?

Mr. Whitlock: The question whether the British Government should assume responsibility for pensions for British expatriate officers is a matter for my right hon. Friend the Minister of Overseas Development. The Tanzanian representations are at present under consideration by the Departments concerned. Although my right hon. Friend naturally has a close interest in the matter, it is primarily one of responsibility for the Minister of Overseas Development.

Dependent Territories (Public Lotteries)

Sir J. Langford-Holt: asked the Secretary of State for Commonwealth Affairs whether he will give a list in the OFFICIAL REPORT of the dependent territories in which public lotteries have been operated; in how many dependent territories such lotteries continue to be operated; and with what financial result.

Mr. Whitlock: I am having inquiries made and will publish the results in the OFFICIAL REPORT as soon as they have been completed.

Sir J. Langford-Holt: Will the Minister state that it is the Government's view that these things are not immoral and that they produce money?

Mr. Whitlock: We leave it to the territories concerned to make proposals. There are in operation in Hong Kong and Gibraltar two public lotteries which I understand are very successful.

Tanzania

Sir J. Langford-Holt: asked the Secretary of State for Commonwealth Affairs whether he will make a statement on relations between Tanzania and Great Britain.

Mr. George Thomson: The break in relations brought about by Tanzania in December, 1965, still remains. The hon. Member will know that I had a talk with President Nyerere on 28th October at Arusha during my recent African tour. I indicated then that we are ready to resume relations if asked to do so.

Sir J. Langford-Holt: Is the Minister aware that the British public is a little fed up yith a situation in which the only hands of friendship extended to us are extended with the palm upwards?

Mr. Thomson: I get a bit fed up sometimes, but it is important to have normal relations with a Commonwealth country like Tanzania. But I want to make it clear that this is up to Tanzania.

GOVERNMENT INFORMATION SERVICES

Sir T. Beamish: asked the Prime Minister if he will make a Minister responsible for the co-ordination of Government information services in the United Kingdom, and for answering Parliamentary Questions on this subject.

The Prime Minister (Mr. Harold Wilson): I would refer the hon. and gallant Member to the Answer I gave to a similar Question by the hon. Member for Banbury (Mr. Marten) on 8th December, 1966.—[Vol. 737, c. 1571.]

Sir T. Beamish: Does the Prime Minister thing that the appointment of only 122 extra P.R.O.s and Press Officers in the Government Departments during the past three years, at a cost of £500,000 a year, is sufficient to improve the Government's popularity? Does not he think that there is a case for a whole lot more?

The Prime Minister: The appointment of official public relations officers is not related to party functions or Government popularity. The hon. and gallant Gentleman is once again confusing the appoint-

ment of Ministers for Tory Party propaganda in the past.

Mr. Heath: Will the Prime Minister accept that if it was one of the P.R.O.s who yesterday released the good news that the Industrial Expansion Bill is to be shelved he is certainly worth his keep? Will the Prime Minister now confirm that the Bill is to be dropped?

The Prime Minister: I am sorry to disappoint the right hon. Gentleman. The story to which he refers did not come from any Government P.R.O., nor is it true.

Mr. Heath: Can the Prime Minister then say the source of the report?

The Prime Minister: No, Sir. I have no idea of the source of the report. The reports I read referred to a quite inaccurate account of the discussions between my right hon. Friend the Secretary of State for Economic Affairs and the C.B.I., but the report could have come neither from him nor from the C.B.I. because the matter was not discussed at that meeting.

CAMPING FACILITIES (DEVELOPMENT)

Dr, David Kerr: asked the Prime Minister whether he will now transfer full responsibilty for the development of camping facilities in Great Britain to the Department of Education and Science.

The Prime Minister: No, Sir. The development of camping facilities has a part to play in the Departmental work of a number of my right hon. Friends and is best handled by them. There is, of course, full co-ordination between the Departments concerned.

Dr. Kerr: Is my right hon. Friend aware that there are about 2 million campers in this country, and many more who want to come here from overseas and enjoy camping facilities? Could not he do something to ensure that the integration to which he referred leads to better provision of camping sites and facilities, with consequent saving of overseas expenditure and an increase in invisible earnings?

The Prime Minister: I know that my hon. Friend has taken up with my right


hon. Friend the President of the Board of Trade the importance of camping facilities here for international tourists visiting Britain. I do not think that the right answer is to have one Department responsible. Obviously, my right hon. Friend the Minister of Agriculture, Fisheries and Food mast be responsible on forestry land, and my right hon. Friends the Secretary of State for Scotland and the Secretary of State for Wales have responsibilities. There is also the question of the Countryside Bill. I do not think that it would be right to concentrate everything under one Minister.

UNEMPLOYMENT

Mr. Bidwell: asked the Prime Minister if he will make a statement on the latest unemployment figures and the Government's plans to deal with the situation.

The Prime Minister: The seasonally-adjusted number of wholly unemployed, excluding school leavers, decreased by 5,000 in November to 536,000. As to the Government's plans to deal with the situation, I would refer my hon. Friend to the speeches of myself and my right hon. Friends in the recent debate on the economic situation.—[Vol. 754, c. 1140, 1262, 1330 and 1433.]

Mr. Bidwell: Will my right hon. Friend accept that there is still countrywide concern at the present unemployment figures and the figures for the coming months, if not the next couple of years, which are so important to our movement? [HON. MEMBERS: "Oh."] What is to stop the active participation of State enterprises, particularly in the areas where older industries are to be run down and where it is shown that private enterprise is failing the nation in the export drive?

The Prime Minister: As to the concern referred to by my hon. Friend, I said in the debate a fortnight ago that all of us regard the present figure as too high. My hon. Friend will be glad to have seen that over the past three months, on a seasonally-adjusted basis, the numbers of wholly unemployed adults fell by 23,000 and unfilled vacancies have risen by over 26,000. The estimate I made even before devaluation was that the expectation was that a year from now unemployment will

be considerably less than the present figure.

Sir C. Osborne: Since 5 million jobs depend directly on exports, and we cannot compel the foreigner to buy our goods, how can the Prime Minister guarantee those 5 million jobs?

The Prime Minister: I always agree with what the hon. Geitleman says about the importance of exports to the economy. Now our exporters have a unique opportunity to get the orders. It rests with them. I hope that they will go out and get those orders.

Mr. Thorpe: Since we are faced still with one of the highest unemployment figures for the past 27 years, will the right hon. Gentleman give urgent consideration to whether there are adequate retraining facilities, albeit with the expected increase, and to whether the Minister of Labour's Department should not be strengthened to keep lists of job vacancies and of workers available to fill them?

The Prime Minister: The right hon. Gentleman will be aware of the sharp expansion in training facilities, announced successively over the past few months, and also of the additional steps taken to bring work to areas where there is a shortage of work. As I have told the House on a number of occasions, and as I have just substantiated, the figures of the last few months show that the trend of unemployment, apart from the usual winter movement, has turned markedly down.

Mr. Raphael Tuck: Why do not the Government step into the development areas and establish industries for export there, as they promised to do before the election?

The Prime Minister: There has already been very much development of export industries in development areas in the last three years—indeed, at a record level—and we have provided additional facilities and incentives for other export industries to go there.

Mr. Carr: The right hon Gentleman has provided figures of a seasonally adjusted trend for the last couple of months before devaluation. In these post-devaluation days, how does he foresee the trend of seasonally adjusted figures for the next six months?

The Prime Minister: The general expectation would be that, as a result of devaluation, particularly with the opportunities in export markets—not all of which, of course, can be seized in a matter of days—and also with the possibilities of import replacement, unemployment a year from now should be much less serious—indeed, for the next six months it should be much less serious—than was previously forecast. We are faced with the inevitable increase on seasonal grounds in the months from November to February but I repeat that, a year from now, it is more likely, as my right hon. Friend has made clear, that we shall be facing problems of pressure upon resources than of unemployment.

Mr. Maudling: Has the Prime Minister formed an estimate of the amount by which home demand must be reduced in order to get an improvement of £500 million in the balance of payments?

The Prime Minister: I cannot at the moment add to what my right hon. Friend said in the devaluation debate. As my right hon. Friend the present Chancellor of the Exchequer has made clear, we shall be watching this situation, calculating it right up to the Budget and beyond. We have given priority to all measures to release resources for export in that period to put our balance of payments right.

Mr. Bob Brown: While we are happy that the Government are showing determination to fill the needs of the development areas in the first place and not returning to the selective full employment we had pre-July, 1966, may I ask my right hon. Friend whether he is satisfied that we can undertake this job rapidly enough without a direct State intervention in the form of State industries and factories?

The Prime Minister: What we have announced about State industries in these areas, and particularly the use of State procurement to get more orders placed in development areas, means that certainly the prospects of the development areas are now improving, and, of course, the boost given by the export opportunities following devaluation should be of great help to the development areas because of the increased incentives and the factory space there waiting for new factory expansion.

ADEN (INDEPENDENCE CELEBRATIONS)

Mr. Peyton: asked the Prime Minister if he will seek an invitation to attend the Aden independence celebrations.

The Prime Minister: No, Sir.

Mr. Peyton: Is not that rather a pity? Would not such a visit give the Prime Minister an invaluable opportunity to form a lively impression of the prospects of stability in that area? He might also be able to formulate some criteria of general application upon which independence is granted to other countries.

The Prime Minister: I am sure that that was meant in a helpful and constructive manner. What I have not heard from the hon. Gentleman or from his right hon. and hon. Friends is any constructive alternative to the action we took in Aden, which, in our view, was right. All of us recognise the difficulties both at the time and for the future. The course we took was right.

Sir Alec Douglas-Home: While I understand the Prime Minister's Answer, may I ask whether he would agree that, after the six-months' period of aid at the rate of £12 million, we cannot sustain aid at anything like that scale and that aid must come from the Arab neighbours of South Yemen in future?

The Prime Minister: That is a reasonable approach to the problem. I cannot say whether the independence celebrations, to which I have not sought an invitation, will take place within six months or not. I have nothing to add, on the question of aid, to what my right hon. Friend the Foreign Secretary said when he specifically related our aid to a period of six months.

Mr. Gardner: Notwithstanding the sad history of Aden and the whole of South Arabia in recent years, will my right hon. Friend accept that most of us on this side wish to see him maintaining the friendliest possible relations with this new country?

The Prime Minister: I am sure that that is the wish of the whole House and, of course, friendly relations involve a


two-way attitude—ourselves and them. Some of the most bitter fights for independence, both under right hon. Gentlemen opposite and ourselves, have been followed by the friendliest of relations once independence has become effective.

NUCLEAR DETERRENT

Mr. Marten: asked the Prime Minister what discussions he is proposing to have with other Heads of State about internationalising Great Britain's nuclear deterrent.

The Prime Minister: I have nothing to add to the Answer I gave on 11th July to a Question by the hon. Member for Blackpool, South (Mr. Blaker).—[Vol. 750, c. 412.]

Mr. Marten: Can the right hon. Gentleman confirm whether, as a country, we still have the right to use our strategic nuclear forces if the independence of this country is threatened? Secondly—and we all hope that this is a hypothetical question, as we hope that the deterrent will never have to be used—is it the Government's intention to continue their policy of independent use in the cause of peace?

The Prime Minister: I think the hon. Gentleman knows our position. Our present nuclear forces, which do not yet include Polaris, are committed to N.A.T.O. We have the right to withdraw them after consultation with N.A.T.O. The future of Polaris is still a matter for negotiation and the hon. Gentleman will be aware of the important work of the Nuclear Planning Group in this connection.

Mr. Lubbock: Will the Prime Minister work out how much would be saved if the fleet of Polaris submarines was not commissioned but put into mothballs instead? In view of the state of the economy, will he seriously consider this?

The Prime Minister: I know the deep interest the hon. Gentleman takes in this matter hut I am sorry to say that the saving by mothballing the Polaris fleet when complete would be a great deal less than he probably imagines.

Mr. Horner: Will my right hon. Friend undertake to study the recent report of

the Nuclear Weapons Commission of the United Nations, which clearly condemns the continued existence of individual weapons systems such as our own Polaris? Is he aware that one of the co-signatories of the report was the Government's Chief Scientific Adviser, Sir Solly Zuckerman?

The Prime Minister: I do not think that the report pinpointed Britain. It called for progress towards general and universal disarmament, for which we have been continuously working, as did our predecessors, from the moment we took office. The most immediate requirement is a non-proliferation agreement to stop the spread of nuclear weapons to States which do not have them.

Mr. Emrys Hughes: If my right hon. Friend states that we ourselves will never use nuclear weapons first, how will we be in a position to use them second?

The Prime Minister: The statement about our use of nuclear weapons represents the view always held by this side of the House and, indeed, by our predecessors. As to the second part of my hon. Friend's supplementary question, the matter is not quite as simple as he has in mind.

FAST BREEDER REACTORS

Dr. David Owen: asked the Prime Minister if he will put forward proposals for establishing a European Development Corporation for the exploitation of fast breeder reactors.

The Prime Minister: Her Majesty's Government have made clear that we would welcome European co-operation in the development and exploitation of fast reactors and are already in touch with other European countries to this end.

ENRICHED URANIUM (TECHNOLOGY)

Dr. David Owen: asked the Prime Minister what specific Anglo-American agreement prevents Great Britain sharing with other European countries the technology of partially enriched uranium.

The Prime Minister: None, Sir.

Dr. Owen: Is my right hon. Friend aware that the United States Atomic Energy Commission has already started to negotiate with private industry for the sharing of technology, which implies that it does not take a secret agreement very seriously? Can he press the Americans to try to ensure that we can share this technology with our European partners?

The Prime Minister: In my first Answer, I explained that there is no such, as my hon. Friend put it, "specific" Anglo-American agreement preventing a sharing with European countries of this technology. There are difficult questions about our national and commercial interests if we made this available except as part of something extremely valuable to ourselves. This is why I stressed the importance of co-operation in my speech at Guildhall. We must be dominated in this matter by considerations of national interest but there is no such agreement as envisaged by my hon. Friend.

Sir H. Legge-Bourke: Will the right hon. Gentleman seriously consider taking some active steps to bring about a decision from Euratom first of all to continue financing the Dragon project at Winfrith?

The Prime Minister: That is a specific question and I should be grateful if the hon. Gentleman would put it down on the Order Paper. With regard to general relations with Europe, we are only too anxious to enter into bilateral or multilateral nuclear agreements, whether for the provision of reactors or, as in the Question, for the provision on a European and not on an American basis of enriched fuel.

Mr. Hogg: Has not the difficulty always been the extraordinary reluctance of European Powers with atomic inclinations to make use of our vastly superior technology? Will the right hon. Gentleman make clear both the advantages of their doing so to them and the reluctance of the Government to do so except on a mutual basis of advantage?

The Prime Minister: Yes, Sir. I entirely agree. The difficulty outlined by the right hon. and learned Gentleman has been the difficulty all along and it still is. Indeed, in Versailles in June, I dis-

cussed this question with President de Gaulle and it is a fact that, despite their great advantage in water power, we are fully competitive, without those advantages in our production of enriched Uranium 235. Of course we shall be glad, on a mutually advantageous basis, and only on such a basis, to work with our French friends or anyone else in making Europe less dependent on outside supplies, both of reactors and fuel.

Mr. Lubbock: Has the Prime Minister noted the view of the Select Committee on Science and Technology that internationalisation of our fuel enrichment capability offers an excellent opportunity for collaboration between us and the E.E.C.? Does not this concept fit in well with the ideas he has expressed so enthusiastically for a European technological community?

The Prime Minister: I have noted that important recommendation by the Select Committee and I fully agree with it. Indeed, this view is the basis of what I said at Guildhall and in recent talks with the Belgian Prime Minister and of all our approaches on the atomic side of technological co-operation with our partners in Europe.

Mr. Biggs-Davison: In view of yesterday's statement about non-proliferation, with its European implications, may I ask whether the right hon. Gentleman will give an assurance that nothing will be done under the cloak of international security to deprive Britain of her lead in the civil uses of atomic energy?

The Prime Minister: I am not quite sure to which statement the hon. Gentleman is referring, but in the matter of civil use of atomic energy we are absolutely free. We intend to use that freedom to work with our partners in Europe and more widely in the promotion of our national interest and in the promotion of exports.

B.O.A.C. (PILOTS)

Mr. R. Carr: (by Private Notice) asked the Minister of Labour if he will make a statement regarding the threatened strike by B.O.A.C. pilots.

The Minister of Labour (Mr. R. J. Gunter): Since I reported to the House on 13th November the British Air Line


Pilots' Association has called a strike on 9th and 10th December of its members in B.O A.C., who have been working to rule since 1st November.
I have discussed the situation with representatives of B.A.L.P.A. and with both sides of the National Joint Council for Civil Air Transport. From these discussions it appears that both B.A.L.P.A. and the organisations represented on the N.J.C. are willing in principle to take part in a working party to consider changes in the procedure and structure of the N.J.C.
B.A.L.P.A. is, however, prepared to do so only if it can have immediate and direct negotiations with B.O.A.C. outside the National Joint Council. The Corporation, on the other hand, while willing to negotiate with B.A.L.P.A., feels able to do so only within the N.J.C.
The B.A.L.P.A. representatives, at my last discussion with them, while reaffirming this attitude undertook to give further consideration to their position. I am meeting representatives of the Association later this afternoon.

Mr. Carr: Will the right hon. Gentleman accept that a dispute so damaging to the national interest ought not to be allowed to escalate because of a procedural wrangle about who talks to whom and where? Would not this be perhaps even more silly than a dispute about who sits where?
Secondly, could not the right hon. Gentleman take some initiative, on the understanding that it would be without prejudice to the future position of hte N.J.C. and B.A.L.P.A.'s membership of it, for B.O.A.C. to meet B.A.L.P.A., perhaps under independent chairmanship?

Mr. Gunter: The last point is what I want to talk to B.A.L.P.A. about this afternoon. However, the position is a little more difficult than merely procedure. The great fear of the National Joint Council, of both the unions and the Corporation, is that if one union breaks away there w ill be another 15 who will be able to say that they will all fight their separate battles in their separate ways. They are afraid of anarchy. However, at 4 o'clock I shall be talking to B.A.L.P.A.

Mr. Doughty: Is the right hon. Gentleman aware that the pilots left the National

Joint Council as long ago as last June, having acted perfectly properly in giving six months' notice, that Mr. Scamp inquired into their action and said that there was nothing illegal or wrong with it, and that now although they are not members of the Council, the pilots are asked to rejoin to negotiate? Could there not be terrible damage if B.O.A.C. insists on negotiating with a body of which the pilots are not members? Would it not take years to recover from the results of the worldwide damage to the goodwill of this important airline?

Mr. Gunter: That is true, but it must be remembered that although Mr. Jack Scamp and his committee said that the pilots were entitled to leave the Council if they wished there was a striking paragraph in their report which was almost a desperate plea to B.A.L.P.A. to rejoin it, because the difficulties which would arise with the other unions were foreseen. There is another point to which Sir Giles Guthrie has drawn attention. If direct negotiations, with all the dangers which could arise, were permitted with all the other unions, there would be no rules on which to negotiate, no arbitration and conciliation machinery. There would be what Mr. Scamp has called a complete absence of ground rules. That is one of the arguments which the Chairman of B.O.A.C. advances.

Mr. Mikardo: Will my right hon. Friend bear in mind, when he considers suggestions put to him by hon. Members opposite, that nothing would be gained for the Corporation or the national interest if it came about that the Corporation talked to the pilots outside the machinery of the National Joint Council and then found, as a result, that it was not able to talk to any of its other employees?

Mr. Gunter: I am well aware of the dangers. I do not know what B.A.L.P.A.'s reactions would be, but any informal talks at this stage could not have anything to do with pay. I am much struck by the phrase used by B.A.L.P.A. which says that it is unable to talk about talking. If the deadlock is to be broken—and I do not know what B.A.L.P.A.'s reactions would be—it is possible that it might get something off its chest on the subject of labour relations which has been there for a very long time.
However, I can assure my hon. Friend that there is no question of discussing anything to which the National Joint Council could take exception. There will be informal talks and there may be discussions about labour relations which, in the opinion of the Association, have been bad.

Mr. Rankin: Is my right hon. Friend aware that until the moment when B.O.A.C. declared that it would close down the airways if the pilots came out on strike, the pilots were not thinking of any definite strike? Could he not get B.O.A.C. to rethink that disastrous statement?

Mr. Gunter: I do not want to be put into any difficulty. I can only reflect that unfortunate statements have been made.

Mr. Bessell: Does not the right hon. Gentleman agree that this strike will draw attention to industrial disputes in this country in a wholly undesirable and very dramatic way and that it could do a great deal of damage to our prestige abroad? Will he now intervene personally because, by comparison with the pilots of other airlines, the pilots have a genuine grievance which should be met?

Mr. Gunter: I am not quite sure what the hon. Gentleman means by intervening personally. I am a bit fed up with intervening. I have a lot of meetings to go to.

Mr. Emrys Hughes: Does my right hon. Friend take the view that this strike is part of an international conspiracy to destroy the British economy? Is there any evidence that the pilots' policy is dictated by the Communists?

Mr. Gunter: That is one thing I am sure of—it is not.

Mr. Onslow: Is it not deplorable that this strike, which is wholly against the national interest, should apparently be provoked in part by the pressures and jealousies of rival unions? Will the right hon. Gentleman represent that point of view to Mr. Clive Jenkins, among others?

Mr. Gunter: I do not think that that is true. I do not think that this is a matter of rival unions. It is a fact that national machinery has been built up over

20 years. It has its faults, as Mr. Scamp has said, but there is no reason why its defects should not be gone into. The fear of the unions and of the employers is the disintegration of that machinery.

Mr. Onslow: indicated dissent.

Mr. Gunter: The hon. Gentleman shakes his head, but I know.

Mr. Hugh Jenkins: Is not the support which the pilots are receiving from hon. Members opposite somewhat sinister? Is it not the case that hon. Members opposite are always ready to support claims for more money for those who have a lot already and still less for those who have very little?

Capt. Orr: Is the right hon. Gentleman aware that this is not a matter of money, but of negotiations? Can he say whether the other unions, who appear to be so keen to remain within the N.J.C., have threatened to leave if the Corporation talks directly to B.A.L.P.A.?

Mr. Gunter: Statements have been made about the three-year agreement which has already been discussed. I do not want to pursue that.

PERSONAL STATEMENT

The Secretary of State for Scotland (Mr. William Ross): With your permission, Mr. Speaker, I should like to make a personal statement.
During the closing minutes of the debate on agriculture in the House last night, I referred to page 31 of the Annual Review White Paper as evidence that United Kingdom agricultural net output had gone down. What I had in mind was the decline in the net output in a number of years up to 1958–59. I appreciate, however, that, looking at the longer period up to 1964–65, the trend is upward. I did, therefore, mislead the House and I apologise sincerely for having done so.

OFFICIAL REPORT (CORRECTION)

Dame Joan Vickers: On a point of order. I should like to draw your attention, Mr. Speaker, to a statement on 27th November, c. 68 of HANSARD, when the Minister of Defence referred to me,


according to HANSARD, as the hon. Member for Plymouth, Devonport.
The right hon. Gentleman has now written to me to say that he meant Portsmouth, West and was sending a copy of the letter to the Editor of the OFFICIAL REPORT, who, I gather, is making a correction. I have seen the Minister's brief, where Portsmouth, West was written. This had been changed in red ink by the HANSARD reporter to Plymouth, Devonport.
It is a pity that action was not taken to rectify the matter as the speech was being read through instead of its being left until I had sent the right hon. Gentleman a letter expressing the alarm and anxiety felt in my constituency about the mistake.

Mr. Speaker: I had a word with the Editor of the OFFICIAL REPORT about the matter which the hon. Lady has raised. The alteration which caused her distress, quite understandably, was made by the reporter, who judged from the context that he had made an error and who, therefore, corrected it and substituted the name of one port for the other. The error was made by the reporter. It will be corrected in the Bound Volume. I understand that the right hon. Gentleman has already written to the hon. Lady about it.

INTERNATIONAL MONETARY FUND (LETTER OF INTENT)

Mr. Michael Foot: I beg to move, That this House do now adjourn.

Mr. Speaker: Before I call on the first speaker in the debate, I wish to point out that it ends in exactly three hours. I have already more than 25 hon. Members who wish to take part in it and I shall be grateful if right hon. and hon. Gentlemen will speak briefly.

Mr. Michael Foot: May I, first, thank you, Mr. Speaker, for the decision which you made yesterday about Standing Order No. 9? But in doing so I apologise to my hon. Friends from mining constituencies for the inconvenience which is caused to them by this intrusion. May I say to my hon. Friend the Member for Derbyshire, North-East (Mr. Swain), who is one of my oldest friends in the House, that after this intrusion I shall be quite happy to leave to him the conduct of the rest of the month's Parliamentary proceedings.
Some of us sought to press this debate in the belief that it raised issues of the utmost gravity for the conduct of the British economy. It is in that spirit that I wish to raise the matter. But I should like, first, to make one personal reference to the Chancellor of the Exchequer. I do not think that it is really necessary for me to say this, but I should like him to understand that my hon. Friends and I who have raised this matter do not do so in any personal spirit of ill-will towards him—indeed, we might be able to assist him.
When one of my right hon. Friend's predecessors, Disraeli, was appointed Chancellor of the Exchequer, he was momentarily bashful because he did not know much about finance. He approached his leader, Lord Derby, Leader of the Conservative Party at that time, and explained the position. But Lord Derby replied, "Oh, don't bother; they give you the figures". I am sure that whatever might have happened in years gone by, or days gone by, that does not apply to my right hon. Friend. I assure him that we raise the subject because we wish to discuss the Government's whole attitude to the policy issues involved.
I want, first, to recall the sequence of events which has led to this debate. On Monday, 20th November, the then Chancellor of the Exchequer, in his devaluation statement, referred only briefly to the subject of credit facilities, saying:
They have been assembled as an indication that the international monetary centres of the world are united with us in their determination to put an end to speculation against one of the world's key currencies."—[OFFICIAL REPORT, 20th November, 1967; Vol. 754, c. 938.]
And he went on to refer to the stand-by credit in that sense.
The following day we had a speech from my right hon. Friend the President of the Board of Trade, who did not refer directly to credit facilities but who spoke of a loan in more general terms, saying:
Another alternative might have been a further massive long-term loan, designed to give us the extra time required for our longer-term policies to work. But there were two over-riding objections to this course. First, it would almost certainly have been accompanied by unacceptable conditions as to our domestic policy, and these we were not prepared to accept."—[OFFICIAL REPORT, 21st November, 1967; Vol. 754, c. 1144.]
Then came the reference to the matter by the Prime Minister in the debate on 22nd November, when, in reply to an intervention by the hon. Member for Chigwell (Mr. Biggs-Davison), my right hon. Friend, referring to the previous Chancellor of the Exchequer, said:
My right hon. Friend made it clear on Monday that we were not borrowing for the purpose of living on the sum borrowed, but that it was what might be called a deterrent, to make it absolutely crystal clear, if it was not clear already, that speculation at the new parity was not worth the gain—and with no strings. The loans from the central banks have no strings whatever, as was stated clearly on British television by Dr. Emminger on Monday night, in the same programme in which the right hon. Gentleman took part"—[OFFICIAL REPORT, 22nd November, 1967; Vol. 754, c. 1335.]
That was the Prime Minister early that afternoon. Later that evening the Chancellor of the Exchequer made the most extensive reference to the question of standby credit facilities. I will not read the whole of what he said, because it takes most of a column. He later insisted that the standby credit—not a loan—was for us to use to repel speculation. Previously, however, he had said, because of the rumours that were prevailing:
I therefore want to say now that I have seen the staff of the International Monetary

Fund this morning and they are themselves discussing the matter with Dr. Pierre-Paul Schweitzer. There are regular procedures, as will be known, for going through before a standby credit is established. I want the House to know that on this occasion these procedures are being dealt with much more quickly than on a normal occasion. There is no delay." —[OFFICIAL REPORT, 22nd November, 1967; Vol. 754, c. 1435.]
He went on to describe the standby facilities that were being provided.
That was on 22nd November. On 23rd November, the previous Chancellor of the Exchequer sent the Letter of Intent to the Managing Director of the International Monetary Fund. After the ball was over he sent his billet doux to the managing director. At that time we did not know what was in it. The first hon. Member who understood the implications of what was in it was my hon. Friend the Member for Penistone (Mr. Mendelson), who had seen reports in the newspapers, and he raised the matter last Thursday. But the full document was not published until that night. My right hon. Friend the Chancellor, however, in his replies to questions, insisted that no conditions attached to the standby credit.
I thought that my right hon. Friend went too far in saying that, and I believe that that is the view of many people, and not merely Members of the House. For example, there is the statement in the Sun, two days ago, by Mr. Paul Bareau, who is not generally unfavourable to the Government's policies. He refers to the I.M.F.'s book of rules. It seems that they have books of rules as well as some other people. He refers to the book of rules and quotes from it, saying:
Members may enter into standby arrangements with the Fund … if the Member observes the conditions; for example, specific policies which the Member has indicated it intends to pursue in the fields of exchange, monetary and fiscal matters.
When is a condition not a condition? I do not believe that we can be fobbed off with a conundrum.
Mr. Bareau goes on to state the matter quite fairly. I shall be interested to know whether my right hon. Friend the Chancellor thinks that this is a fair statement. Mr. Bareau says:
The point is that the standby would not have been secured without assurances of correct economic behaviour.


That is what he says is the meaning of the Letter of Intent.
Now let me come to the letter itself. I shall not refer to all the Articles, but Article 9 sets out the numerous occasions on which consultations are to take place between the Chancellor of the Exchequer and representatives of the British Government, and the Managing Director of the I.M.F. The first is to take place in February, 1968—quite a significant date. The review is to take place of the balance of payments situation of the country and consultations are to take place with the managing director at that time, in February. They are also planned for July and November. The insistence upon actual times of negotiation is very precise and regular.
Mr. Bareau suggests that Article 10 is the most important in the whole document. I presume that he is referring to the paragraph which says:
So far as can be seen at present, this entails holding down the borrowing requirements to not more than £1 billion—the appropriateness of which estimate and the measures necessary to ensure that it is achieved will be reviewed with the Managing Director in accordance with the timetable specified in paragraph 9.
Some people, including Mr. Bareau, say that that paragraph and that figure involves an extra £300 million either in extra taxation or extra cuts in Government expenditure, over and above the one announced to the House. [HON. MEMBERS: "£400 million."] Some say that it is £400 million. That is the view published in the Sunday Times on Sunday, and reported to be the view of people in Washington who are in close association with the International Monetary Fund. If that is true Article 10 is an extremely important one.
Article 12 is also important, referring to wages and prices and the new vetting arrangements that the Government are to seek to secure. Article 13 is in some respects the most offensive of the lot. It deals with exchange control. It seems to me a quite gratuitous thing to have to make a general statement of policy about exchange control when we are only supposed to be securing a standby credit for a short period. The Article says:
The Government is determined to maintain the new parity without resort to any additional restrictions on currency payments or intensification of the present restrictions. The Govern-

ment, moreover, intends to abolish all remaining restrictions on current transfers and payments as soon as the balance of payments allows. Similarly, as the balance of payments strengthens, the Government will consider what relaxations can be made in the present restrictions on capital transfers.
Hon. Members opposite may approve that doctrine, but it seems strange for Members on this side to do so. One of the main arguments is that the difficulties that we have got into arose because of the free movement of capital allowed in 1964. We have heard a lot about the £800 million deficit. Part of that was due to the lax way in which exchange controls were operated. We have also had a situation where there has been a considerable increase in the capital taken out of the country—some going to South Africa—in recent years, when we have been most hardly pressed.
It is a shocking thing that the Government, in this Letter of Intent, should have told the International Monetary Fund that they would ensure that we get back to the kind of absence of any exchange control which we know is what the bankers have always wanted. Indeed, we should be putting things into reverse. This is part of the poison that has caused the trouble. In the letter we say that we shall commit ourselves to taking extra doses as soon as possible.

Mr. Woodrow Wyatt: My hon. Friend is making a powerful case against the Government, but rather inaccurately, because the letter says:
Similarly, as the balance of payments strengthens"—
that is all right, is it not?—
the Government will consider what relaxations can be made in the present restrictions on capital transfers".
It predicates a strengthening of the balance of payments. If we join the Common Market—and the majority of the House agrees with that proposal—we shall have to allow capital transfers as it is.

Mr. Foot: That is one further disadvantage of joining the Common Market. I am glad that my hon. Friend has the point at last. It has taken us about 10 years to get it into his head. The whole House knows the appalling extra burden on our balance of payments problems which entry into the Common Market would entail. But I should be


out of order if I proceeded with that argument.
There are other objectionable Articles, but I want to quote only the final one. The right hon. Member for Wolver-hampton, South-West (Mr. Powell) thinks that part of this document is translated from the French. He is quite wrong. There is a deflationary bankers' language, which is the same the world over—a kind of excruciating Esperanto. Article 16 says:
The Government believe that the policies here outlined are adequate to achieve the economic goals described in this letter. If, however, present policies should turn out to be inadequate, the Government is firmly determined to take such further measures as may be necessary to achieve these goals. If, in the opinion of the Government of the United Kingdom or the Managing Director of the Fund, the policies are not producing the desired improvement in the balance of payments, the Government of the United Kingdom will consult with the Fund, during the period of the standby arrangement and as long thereafter as Fund holdings of sterling exceed 125 per cent. of quota, to find appropriate solutions.
When I read that document I was amazed and shocked. I could not believe that, after all the undertakings we had from the Government Front Bench about the absence of strings and conditions, the Government would have entered into such an elaborate labyrinthine commitment as that. I could not believe it.
I know that there are some hon. Gentlemen opposite who perhaps will say that these are quite normal matters, that this is regular procedure—that is what the Chancellor said—that it is common form, and that this is the kind of document which has to be signed if we borrow money from international bankers. If that is the case—against what I am arguing—there are some preliminary questions which follow. I will come to the major questions later.
First, if that is the position, can we have all these Letters of Intent published? I think that my right hon. Friend set a proper example. If the document has been signed and dispatched it is right that it should be published. Therefore, we should have published the document signed by the right hon. Gentleman opposite and the previous one signed by this Government, because they might tell us a lot about the economic history of the

last few years. It would be interesting to co-ordinate these documents with the arguments that we have had about prices and incomes policy.
The first thing I ask the Chancellor to do, then, is to get the agreement of the Government that we should have all these Letters of Intent published so that the people will know exactly what is the relationship between this country and the foreign bankers, because, in my opinion, this goes to the very core not merely of our financial structure, but even of our democracy.
The second question I put to my right hon. Friend—although maybe it is the Prime Minister who should answer it and not him—is: was the approval of this Letter of Intent unanimous in the Cabinet? The Prime Minister went out of his way—breaking convention in some degree, though I do not complain about that—to tell us that the package that was presented to us on Saturday, 25th November, was unanimously agreed. Did they all agree to the Letter of Intent? We would like to know whether there was unanimous agreement. I would be surprised to think that the whole of the Cabinet had agreed to the letter.
The third question is: if this is the regular procedure, and if it had all been agreed by the Cabinet, why did they not tell us? Why did they not tell the House of Commons and why did they not tell the country? Why did they not tell us during the debate, when references were made to the credit facilities? It would have been open to the Chancellor to say, "I cannot read the whole letter, but I would like the House to know that whenever we borrow money, even on a standby basis, we have to write a letter to the managing director in the same terms which we did not mention before, but we will this time. These are the terms that we have to sign, terms which affect the whole range of economic policy"—because that is what they do affect.
Those are preliminary questions. The main question is: what are the economic consequences for this country of this Letter of Intent? Let us take, first, how it affects the very considerable section of the community which some of us think should most of all be protected by a Labour Government—the section of


the community which will be most adversely affected by devaluation and the consequent increase in prices.
The Government, in their statement to the House—upon which we voted—said that they were absolutely committed to introducing measures in the spring or at an early period for increasing social benefits. That is what they must have meant. That was included in the statement made to the House, but it was not included in the Letter of Intent to the bankers. Nor is it mentioned in the addendum to the Letter of Intent of the measures introduced.
That is very strange. Do the Government think that they will deceive the bankers about it? Even bankers can read. Do the Government think that they will deceive them, because the bankers will be able to discover this. It may be that bankers can add up as well as react and they might make the addition and say, "If the Government are committed"—as they are—"to introducing measures for increasing social benefits of a very considerable character, that must add to the Government expenditure". Quite rightly so, in my opinion. But what is the point of concealing it or attempting to conceal it or not including it in the letter or not putting a figure on it? If the Government want to convince the bankers, they should put a figure on it so that we should be able to see what is involved.
Many hon. Members will remember very well that in October, 1964, when we were seeking to secure an earlier payment to old-age pensioners, we were told by my right hon. Friend the Member for Sowerby (Mr. Houghton) how it was not possible for the Government to go ahead as fast as they wished because of the international pressures to which they were subjected then.
What will happen? When the Government do proceed to carry out the pledge which they made to the House and the country as part of their devaluation package of increasing social benefits, all the bankers wake up and say, "No, we are not in favour of that." Very often they have been opposed to it and they might protest, so it might have been better to include it in the Letter of Intent if that is what was intended.

Mr. Wyatt: Does my hon. Friend think that the letter goes far enough?

Mr. Foot: The letter should state the fact that the Government is committed.
I turn to the other matter that is governed by the letter—the scale of deflation that we will have in this country over the coming months. The scale of deflation will be partly determined by that letter, partly determined by the commitments in that letter, and partly by the calculation of how much more money has to be taken out of the economy to satisfy the bankers that we are proceeding to carry out the policy that they approved. Or are we to be told that that is no problem, because the British Chancellor will always agree with the head of the International Monetary Fund about these matters?
I would not make such an accusation against my right hon. Friend. I do not think they will always agree. For if they do, why change Chancellors, or why even change Governments if they will always agree with what the Managing Director of the International Monetary Fund has to say about how our economy should be run. That concurrence would remove from the field of politics most of the major issues. Some of us are determined that they shall not be so removed. Some of us are determined that we shall not accept the doctrines of the bankers in these matters. We say that partly on moral grounds.
What Mr. Bareau describes as correct economic behaviour or what the bankers like to regard as correct economic behaviour some of us regard as being an outrage against humanity; that is, the maintenance of a higher level of unemployment than is required in any sense whatsoever. So we do not accept the bankers view about that and we are not prepared to have somebody in the International Monetary Fund dictating to this country what should be the level of unemployment.
Over and above that, we know that this country has been operating for considerable periods under these Letters of Intent. Look where it has led us; look at the policy that they have prescribed to us. In all these great crises the bankers have always thrown their influence on the side of a severe deflation. If we were to add up the total wealth


that this country has squandered in 1953, 1957, 1961, 1965 and 1966, with its deflationary policies, if we had not carried through those policies throughout those years, huge amounts of wealth would have been added to this country. Nobody knows that better than the Front Bench, because this is what they preached prior to 1964. They said that the paramount aim of our policy must be to secure expansion so that there shall be no such wasted resources. We say that, unfortunately, this document appears to put us back to the position in which we were before.
The Prime Minister said that we had escaped from the straitjacket. Here he is putting us back into it. What the country has suffered from more than anything else over the past 15 years is continuous doses of sound Conservative finance, and this is a prescription for another dose.
That is the situation. We therefore believe that it is essential to make our view clear to the Government, and to let them know what we think of the commitments into which they have entered in this document. We believe that this is not necessary. Many hon. Members who have stated their views to the House on many occasions over the years have presented an alternative policy to the one prescribed by the Government. We believe that it is not necessary for the Government to show their obeisance before what the bankers require. There is a whole combination of measures which can be devised and employed to enable this country to secure swift economic independence. This is what we want to secure, and when we see the indignities to which we are being subjected, we want to secure it all the more swiftly.
We say that the way to do it is to break out of the conventional framework of the last 15 to 20 years, the framework of a crushing military burden, the frame-work of allegiance to laissez faire economics and the framework of an acceptance of terrifyingly orthodox financial policies. Many of us hoped that the Government's decision at last to accept devaluation was a sign that they were beginning to move towards these fresh policies. We hoped that they would move faster in that direction, but the publication of the Letter of Intent showed that there were

still those who were wedded to the old policies. And it was not necessary for us to accept such dictates. This country is extremely rich with great productive resources and inventive genius, and if the Government would only plan to use them, would only plan to mobilise our resources, we would not have to borrow a penny from moneylenders. We would not have to borrow from those who are seeking to impose on us policies which have led us to such difficulty and disaster.
In the view of many of us, this document is an ignominious letter which should never have been signed by a member of a British Cabinet, and should never have been despatched by a British Labour Government. Therefore, many of us will work for policies and for a Government which can save us from these humiliations.

4.12 p.m.

Mr. Nigel Birch: The hon. Member for Ebbw Vale (Mr. Michael Foot) and I have taken part in many debates together. We have never succeeded in agreeing on the fundamentals of any problem. We have quite often agreed about the conduct of the Government, and I profoundly agree with the hon. Gentleman that for some wholly incomprehensible reasons Ministers have been guilty of trying to deceive the House.
The hon. Gentleman quoted what the Prime Minister said at col. 1335. He said much the same at col. 1334. I defy anybody to read those statements and not to draw the firm conclusion that the Prime Minister was not going to take a loan with any strings or conditions attached to it, and that is certainly what hon. Gentlemen below the Gangway opposite thought he meant.
I thought that the new Chancellor of the Exchequer went even further in the key answer which he gave to the Leader of the Liberal Party during his statement on the Letter of Intent. The Leader of the Liberal Party asked whether the Chancellor's freedom of manceuvre in his Budget would be affected, and the right hon. Gentleman gave the firm answer that it would not.
How can anyone say that freedom of manceuvre will not be affected when a promise has been made that we will not borrow more than £1,000 million, and when we have promised to show the


Budget to Mr. Schweitzer before introducing Why, in the name of God, did the Chancellor of the Exchequer not read the heards of agreement, or say that every report in the Press was true? To tell a lib when one is bound to be found out within 10 minutes is pathetic—childish.
I will not pursue the Prime Minister's part in all this. To accuse the Prime Minister of a lack of truthfulness is surely a work of supererogation. He might think, that, with his record, the only way to tell the British public that he is going to accept a loan with strings is to deny it. The matter is not worth pursuing. I think that a lot depends on the Chancellor. The last hope of getting things right depends on the new Chancellor, and he cannot afford to show a lack of candour.
There has been no general revival of confidence in the £ since devaluation. This was true before the latest rail strike. There has been no real revival, and I think that people's minds are being confused to a certain extent because so many financial commentators were in favour of devaluation, and therefore when it came they felt it necessary to have a celebration and to talk about the British economic miracle, and so on, but they have not talked about some of the senior aspects of devaluation, which are of desperate importance.
One is the way in which this adds to our indebtedness. A simple way to illustrate this is to consider what has happened about the American loan which was negotiated by Lord Keynes under an earlier Labour Government. We borrowed £931 million from America. We have been repaying it, with only three breaks, for 20 years. As a result of two Labour Government devaluations, instead of being less than £931 million, it now amounts to £1,287 million, finally payable in the year 2005, and, therefore, everyone in the House will spend the rest of his working life paying off that loan.
There is, next, the effect on sterling balances. I think that the present Home Secretary was right, in his resignation letter, to put the fact that he had to break faith with the holders of these sterling balances as his real reason for going. We have assured these people again and again that we would never devalue. They

did not altogether believe it. Many have started pulling back, and they do not feel any confidence now.
What the effect on them will be of the speech of the President of the Board of Trade I hardly like to think, because he said that the holders of sterling balances had no reason to complain because they had been getting interest on their money. This will put them into a cold fury, and if this starts breaking up the sterling area, or is the death agony of it, it will wash away any other efforts that we can make.
Lastly, there is the question of our reserves. Today, we saw an increase in our reserves, but what do they really amount to? The only figures which we know are those of the money from the I.M.F. and the Swiss loan, but in addition to these there are enormous sums from foreign central banks. On top of that, for many months now we have been putting off the evil day by operating in the forward market. This means that we say to people, "All right, we will give you dollars for your sterling, but not just yet. We will do this in three months', six months', or a year's time ". The Government have never been willing to disclose the sums involved, but I believe that they are large.
At the height of the crises in 1966 we had borrowed more than our total visible reserves. I can believe that that is the case now, and, therefore—and this has to be faced by hon. Gentlemen below the Gangway opposite—we are in a pretty tight corner. The Chancellor cannot afford to show a lack of candour. One can lead the people of this country in difficult times, but to do so one must tell them the truth. The Chancellor will have to do a lot of difficult and unpleasant things, far more difficult and far more unpleasant than they need have been if they had been done in time, and far more difficult and unpleasant because the former Chancellor's consumer boom is now under way, which makes the situation far more complex and difficult.
We know we can do it, and that the Chancellor could do it, but will he? I do not know. I think that we must all, in our own interests, pray that he will succeed. The real difficulty about Labour Governments is that they do not get out of financial crises. In 1931, they split. In 1947, they broke the conditions


under which we received the American loan, and spent the money. In 1949, there was a 40 per cent. devaluation, and in 1951 they ran for it. This crisis has been going on and intensifying for three years.
If the Chancellor of the Exchequer is to get out of these difficulties he must show candour, courage and political strength. It he can show them, well and good. If he cannot, he had better run for it now.

4.20 p.m.

Mr. Joel Barnett: My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) made a number of good points, but I cannot help feeling that, while one could understand and appreciate what prompted them, to read into the Letter of Intent the sort of indignity which he read into it and to say that our freedom of manoeuvre, referred to by the right hon. Gentleman the Member for Flint, West (Mr. Birch), is being restricted is to be blind to the situation. Our freedom of manoeuvre is restricted not by the Letter of Intent, but by our financial and economic situation. I therefore cannot help feeling that my hon. Friend had more an emotive point than a practical one.
The far more valid and more important point for the House to consider is that if we do not improve our balance of payments situation we will need to consult many more people than simply the Managing Director of the International Monetary Fund.
There are two issues facing us: whether we should take the loan and, if we take the loan, whether we should have accepted the strings and conditions attached. The first poses the question whether there was an alternative to taking the loan. In my view, once we had accepted a 14·3 per cent. devaluation, rather than a bigger devaluation something else was needed. I wanted a rather bigger devaluation, but because of the necessity and the importance of getting international agreement, we could not go further than the 14·3 per cent. It was, therefore, necessary to take other action.
Some of my hon. Friends suggest that there was an alternative, for instance, to reduce our defence expenditure. I have made it clear in the House that I agree

with them entirely about cutting massively and speedily our defence expenditure, but we should be deluding ourselves if we imagine that in the immediate 12 vital months we could make these massive and speedy defence cuts. We cannot do it and we must face the immediate prospect before us.
The other alternative which my hon. Friends put forward is to sell some of our private portfolio investments. I have said before in an economic debate that this is not an answer to our problems. It is like a company in serious and fundamental difficulties bringing in an influx of new capital without dealing with the fundamental problem. The confidence factor in whether or not that company or, as in this case the country, intended to solve its fundamental problems would not be dealt with. That is the important point which is not considered—and there are many others. Dealing with the problem by selling off our private portfolio would not deal with the need to switch our resources from home consumption to exports. So it must be clear that we need some strengthening of our resources in addition to the 14·3 per cent. devaluation, and I do not feel that the suggestions of my hon. Friends are realistic alternatives to the proposal to take the standby loan.
Were there any alternatives to the strings and conditions? It is, incidentally, a quibble as to who attached the strings. Any responsible person borrowing money will attach his own strings—the string of wanting to be able to repay the loan. It is absurd to quibble or argue about who attached the strings or conditions. But the strings and conditions referred to in cols. 651–2 of HANSARD for 30th November will be needed in order to achieve the switch in resources which we need, and they would have been needed whether we signed the letter of intent or not. It is silly and irrelevant to argue whether it is "deflation".

Mr. Sidney Silverman: Is my hon. Friend aware that in last Monday's debate the President of the Board of Trade said very clearly that devaluation was not equivalent to deflation? Having persuaded me on that occasion, what does he expect me to do today?

Mr. Barnett: What my right hon. Friend said, rightly, was that there was no net deflation in this package, because while we must all hope that there will be a deflation in home consumption there will be an increase in export demand and there will thus be no net deflation. One can argue about whether it is or is not deflationary. I am not very concerned about that. This is a quibble about words. But I do not know any other methods than the ones suggested to switch from home consumption to achieve the level of exports which we need. If any hon. Member can show me another way, whether by selling portfolio investment or otherwise, whereby we can get this switch, I will be glad to listen to him, but I do not know that one exists.
By far the most serious point is that if we do not deal with the current financial and economic situation in this way we could be faced in a short time with a most serious situation, because there is already talk among irresponsible people about the situation in Britain. If irresponsible rumours of that sort arose again, there would be a disruption of the world monetary system which would be harmful not only to Britain, but to the trading position of the world.
If these measures are to be called deflation with strings and conditions—call them what one will—whether or not they were put in a Letter of Intent, they were necessary. So, because I believe that the package will give us the growth and full employment which we desperately need, I support this package and ask my hon. Friends to do the same.

4.28 p.m.

Mr. Richard Wainwright: It is the Liberal view that, so that the necessary devaluation might be carried out with a reasonable chance of success, the stand-by loan facilities were necessary, and that, to obtain those facilities, the Letter of Intent was also necessary and in no way surprising. We regard the surprise expressed in some quarters of the House as somewhat naïve. Where we part company with the Government is that the Letter of Intent to the International Monetary Fund has been used as the main statement of intent to this country. This, we think, is quite inadequate.
I confine myself to two aspects. The syrup applied to the European bankers is being used as a diet for the people of this country in respect of incomes policy. I draw attention to paragraph 12 of the Letter of Intent. The crucial question of how far wage increases for the low-paid are permissible in our present circumstances is dodged in the curious and, to me, almost meaningless sentence:
There is no criterion for pay increases related to changes in the cost of living.
I hope that those with the invidious job of dealing with requests for wage increases will hear from the Chancellor tonight what that sentence means. Does it mean that there can now be wage changes related to the cost of living, but that the Government are not laying down criteria by which to judge them, or is it intended to mean, what it does not say, that there are to be no changes of wage in respect of changes in the cost of living?
If that is so, we are back to the desperately weak contradiction which has undermined the whole Government incomes policy since July, 1966, namely, the total failure to define the low-paid. The Command Paper of 30th June, 1967, which is freely quoted, naturally, in the Letter of Intent, brings us back to an equally meaningless proviso. One of its four provisions for wage increases, which is now current Government gospel, was:
… where there is general recognition that existing wage and salary levels are too low to maintain a reasonable standard of living.
For 90 per cent. of our population there is "general recognition" that they do not have "a reasonable standard of living". Very few of us consider that we have, granted the opportunities and possibilities of the 1960s.
This also wholly dodged the admittedly awkward question of defining the low-paid who must have special consideration, even during a national emergency. I do not pretend that it is easy, but until the Government insist on a definition, even if a fairly harsh one, they will not get industry, by which I mean unions and employers, to "carry the can" for them by refusing wage increases. At the moment, those in industry who are being asked by the Government to refuse wage claims are being


asked to "carry a can" full of acid and of holes.
I turn to the absence of any measures to counteract the enormous and, since 1949, unprecedented increase in protection of the home manufacturer which devaluation automatically gives. If someone is asked to bring himself to the peak of physical condition to run a marathon race, one does not give him a Christmas present of a feather pillow; yet this is exactly what devaluation inevitably brings, unless there are countervailing measures.
As my right hon. Friend the Member for Devon, North (Mr. Thorpe) said in the devaluation debate, we would like—we have said so since 1964—devaluation accompanied by large cuts in Customs tariffs. One obvious example is the British-made motor car. What will happen now? The steel from which it is made—many motor manufacturers have threatened British steel makers with the use of imported steel because of its alleged quality—the rubber tyres, even the sparking plugs, will all be protected from healthy foreign competition, let alone the assembled vehicle.
Neither Liberals nor anyone else want this country to engage in a sudden spree of buying foreign. What we want is the lazy, the inefficient and the lackadaisical home manufacturer to be subject to the deterrent of available foreign corn petition. That is just what devaluation removes unless we are to hear from the Government tonight of some measures to counteract the automatic effects of devaluation with a sharp decrease in certain strategic tariffs. Unless we can hear that the placebo which has, naturally, had to be given to foreign bankers will not be used also as the main diet for the British population, we shall feel bound to oppose the Government on this issue.

4.34 p.m.

Mr. Woodrow Wyatt: There was one point in the speech of the hon. Member for Colne Valley (Mr. Richard Wainwright) with which I agree, and that is his reference to the naivety of some of my hon. Friends in supposing that one could obtain very large loans with no indication of how one proposed to repay them. A letter of intent in which one says how one proposes to repay is not

the same as attaching conditions to the loans.
If my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot), for instance, asks his bank manager for a loan the latter may ask him how he intends to repay it. My hon. Friend may tell him of his very large earnings through writing for the Evening Standard and other journals. But the bank manager does not say, "Unless you do the following things, I shall not give you the loan." He would be well satisfied with my hon. Friend's good faith and intentions. That is the argument.
What distresses me about my hon. Friend is that he is so sincere and so anxious for the Labour Government to succeed. I know him well and love him dearly—

Hon. Members: Order.

Mr. Wyatt: Well, I do, and hon. Members opposite are not going to stop me.
By his Motion this afternoon, my hon. Friend is doing the one thing which he should know is fatal to the Labour cause. He is making the country feel that we are not fit to govern. It is he, above all, who is bringing up the ghost of 1931 and the bankers' ramp and all that kind of damned nonsense, making people feel that the Government have lost control of their own destiny when they have not.
If the Letter of Intent had not been written, it jolly well should have been, because one must tell anyone from whom one is borrowing money how one proposes to make the repayments. One cannot go on having loans without end as this country has been doing without that. My hon. Friend the Member for Ebbw Vale speaks of these foreign bankers as if they were some kind of criminal conspiracy—

Mr. Russell Kerr: That is right.

Mr. Wyatt: "That is right", says another hon. Gentleman down there. This is the International Monetary Fund, a world organisation, which is one of the few co-operative and constructive financial acts which have occurred since the Second World War. We are trying to get a co-operative approach among the nations towards helping each other out of their financial difficulties. This is not


some kind of plot to bring down British Socialism. The Letter of Intent does not go half far enough if Britain is to restore confidence in her ability to maintain the £, even at the new level.
Everybody knows that in one way or another—I will detail some of them—we have been living above our income—

Mr. James Dickens: Rubbish.

Mr. Wyatt: It cannot be rubbish, because—

Mr. Dickens: Is my hon. Friend aware that, during the three years 1964–66 inclusive, the total deficit on balance of payments was £1,293 million, that is, rather less than our total outgoings on the foreign exchange costs of overseas military spending, plus the net outflow of private capital to advanced industrial countries? How, then, are we living beyond our means?

Mr. Wyatt: I am very grateful to my hon. Friend. I was one of the first to point out this fact to him—

Mr. Dickens: Even for my hon. Friend, that is utterly ludicrous.

Mr. Wyatt: It was my right hon. Friend the Member for Woolwich, East (Mr. Mayhew) and myself and some others on the so-called Right wing of the Labour Party who converted the so-called Left wing of the party to the proposition that one of the fundamental difficulties in our balance of payments is that we spend far too much on overseas military expenditure. Of course, we all know that we are living above our means in many different ways. My hon. Friend referred to one of them.
The whole of this proposition is a matter of confidence. Whether we like it or not, 30 per cent. of the world does its trade in pounds and there are about £3,000 million worth of sterling balances deposited in this country. The owners of those deposits are entitled to draw them out at any moment and convert them into any foreign currency. So, we are in a fix, and if, at any moment, people abroad believe that we cannot sustain the value of the £ in its present position, obviously, they will make the best arrangement they can for themselves, their clients and their

countries to protect themselves against such an eventuality.
The whole matter is one of confidence and sometimes on a very narrow margin. The Letter of Intent is designed to restore confidence among the International Monetary Fund and other bankers so that we do not have another run on the £—

Mr. Stanley Orme: Will my hon. Friend give way?

Mr. Wyatt: I will not give way again. The last intervention which I allowed was not very fruitful, and only underlined the fact that my hon. Friend the Member for Lewisham, West (Mr. Dickens) had just come to a conclusion to which I came many years ago.
The reason that I say that the Letter of Intent does not go far enough is that everyone, whether in the City of London or in overseas capitals knows that the intention to spend £200 million a year less in Government expenditure is a very bad joke, because it is not a reduction in the amount which will be spent next year as against this year, but only a reduction in an intention to spend a great deal more next year than this. So there will be no reduction in Government spending next year at all, but a vast increase, quite apart from the Letter of Intent. My hon. Friends must face the fact that, until we start operating this country on sensible lines, people abroad will not have confidence in us.
The abolition of prescription charges was the most expensive memorial ever made to any one man. I refer to the late Aneurin Bevan. We all know that the reason we now spend as a Government £40 million a year on prescriptions which we were not spending before is because of the argument which Aneurin Bevan had in 1951 with Hugh Gaitskell about teeth and spectacles. This is no way in which to run a country. Everyone in the country knows that it was not unreasonable to ask people to pay 2s. for a prescription—

Mr. Orme: Who says so?

Mr. Wyatt: Well, everybody with any sense knows—[Interruption.] I have talked to many workers about it. My hon. Friend does not have a prerogative in talking to workers. I even employ


workers. What is more, we have to make a profit, which is more than my hon. Friend does. Everybody knows that the previous arrangement, by which those who needed it were able to get prescriptions free, worked perfectly adequately.
One such act by my right hon. Friend the Chancellor, the abolition of free prescriptions, would instantly restore confidence in the £—[HON. MEMBERS: "Nonsense."] Of course it would. I will take another instance. If my hon. Friend can contain himself for a moment, I will come to something which he will like much more. He cannot have only the sugar; I will give him the unpleasant things first and then I am sure that my hon. Friend will agree with me in a moment.
I turn now to family allowances. As from next April, we propose to add to that bill £124 million in a year. What on earth for? It will not to any great extent benefit the half or three-quarters of a million children who are really in need. If hon. Members want to know, I am to get an increase in family allowances and I damned well do not need it. This is utterly absurd, and the country knows it.
It would be simple for my right hon. Friend to devise a scheme by which the really needy got more than they will get, and thereby save about £80 million a year straight away. By these two means—by dealing with family allowances and prescription charges—we could net about £120 million a year more in savings, which would convince the world that the Labour Government in Britain were determined to do something to put our spending right.
In the Letter of Intent there should not merely be wishy-washy references to pious hopes about wages, but a clear intention to have legislation again to make certain that wages are not allowed to rise unless there is a corresponding and genuine increase in productivity.

Several Hon. Members: rose—

Mr. Wyatt: I assure my hon Friends that interruptions, entertaining though they may be, merely prolong my discourse.
Unless we see to it, not merely by pious hopes, but by real action, that wages do

not rise while prices rise—and prices will rise far more than the Government have forecast—we will wipe out within a few months the whole advantage of devaluation and find ourselves back where we started. What frightens me about the Letter of Intent is that it contains no intention on the part of the Government to legislate to make sure of compulsory wage restraint.
It is absolutely useless to pretend that George Woodcock, amiable fellow though he is, will be able to dissuade unions from having vast wage increases; and the moment prices begin to rise, the pressure on the Government will be insupportable. They will have to give in unless they have legislation to prevent them from doing so.
At the same time, I agree that the prices side of the Prices and Incomes Board should be strengthened. It should be remembered, however, that it is far stronger on prices than it is on wages because price increases are genuinely held up for a longish period before they are agreed by the Board, whereas wage increases can be retrospective, so that there is no real effect on wage increases at all.

Mr. Orme: Terrible.

Mr. Wyatt: I am pleased that my hon. Friend considers that this is a terrible speech. It means that at last he is having some of the ghastly facts which face his country placed before him.
Unless the Labour Party—which my hon. Friends and I all love—is prepared to face up to the realities of the present situation, and realise that devaluation is not a pipe dream which will take us over the hump, we will be out of office for 30 years. The new Chancellor of the Exchequer is probably the last hope that the Labour Party has for a generation. To start his period of office off by bully-ragging him is the most extraordinary way of supporting the Labour Government—particularly when we are faced with such grave difficulties.
I turn to a topic of which some of my hon. Friends will approve. I simply cannot understand how it is that, three years after taking office, a Labour Government are still spending about £570 million a year, in devaluation prices, in Government expenditure overseas compared with a total expenditure by the Government overseas of £16 million in


1938. This is one of the most extraordinary failures to face up to the facts in the history of politics.
The Government have said that they propose to bring back our troops east of Suez in 1975 or thereabouts. Since they have made that announcement, the troops there are now serving no good purpose. Why not withdraw them now? What would be the difference over our long history between withdrawing them in 1975 or in 1970? The difference is that there would be an enormous increase in confidence in the £ throughout the world and an enormous increase in our belief that we intend to live within our means. We could easily withdraw our troops in two years' time. We disbanded the entire Indian Empire within six months. We could certainly do the same in Singapore, Malaysia, and so on. I would say the same for our troops outside Europe. What are we doing with troops in Libya, Cyprus and Bahrein? They do nothing but make a focus of discontent against us.
Exactly the same situation existed in Persia, where we tried, at the time of Abadan and Mossadeq, to achieve our aims by force. From having 100 per cent. of the oil concession we have only 25 per cent.—because our troops were there. There can be no economy unless there is common sense. We should take our troops out and draw back to something approaching the £16 million a year that we spent in 1938, at post-1967 devaluation prices.
We are spending in overseas aid—by way of gifts, grants and loans—£207 million a year, but we do not have the money. We are borrowing from the gentlemen in Zurich to dish out to other countries. We are also spending £90 million a year more than world market prices for our food to help the underdeveloped countries. This is crazy for a country which has no money to undertake these responsibilities. We have the instinctive gestures of the rich man and no money to support them.
The Letter of Intent does not go far enough. I congratulate the Government on having had the good sense to write it in the first place, but it is a pity that it has not gone further, because Great Britain must cut back or she will not survive.
One of the features of post-war politics has been that every time the country has been asked to accept temporary inconveniences to earn ourselves a stable future, it has revolted against it, encouraged by whoever happened to be in opposition at the time. Does the Leader of the Opposition ever say what he knows to be true; that only a compulsory wage freeze can possibly pull us through? He tells the electors, "Vote for us and you will have an easy ride". It is always the same.

Mr. Edward Heath: If the hon. Gentleman casts his mind back to the last General Election he will find that I told the electorate exactly the opposite. I said that a hard ride was the only way to bring us through. In any case, I did not not agree with the compulsory wages and incomes freeze.

Mr. Wyatt: Of course the right hon. Gentleman does not say so. That is because he does not think that his party would ever get elected if he said so.
The whole country is bedevilled by this business of pitting ourselves against each other, always pretending that we will provide a mysterious extra very high standard of living without working for it. We must cut back.
The new Chancellor of the Exchequer is our last chance; and this is not merely the last chance for the Labour Party—[Interruption.] I believe that to be true, because if he fails, and we have another devaluation, as many knowledgeable people think we shall have, within another 18 months—

Mr. Robert Maxwell: Rubbish.

Mr. Wyatt: It is no good pretending that they do not believe this. They do not believe that the Government are tough enough to take the right measures. If the Chancellor of the Exchequer fails, I fear that the Labour Party will be out of office for 30 years.
On the other hand, if the Chancellor does the unpopular but right things, then we can win the next election—[HON. MEMBERS: "Oh."]—as well as saving Britain, which is even more important. I know that hon. Gentlemen opposite think that nothing is more important than


winning an election. I believe that saving the country is far more important.
At present, the Chancellor is in a unique position. For a few months he can be as tough as he thinks is properly right and the Cabinet must bend to his will. The Cabinet could not possibly allow him to resign. The resignation of a new Chancellor within two or three months would be more than even my right hon. Friend the Prime Minister could stand.
Thus, the Chancellor finds himself in the extraordinary position of having almost absolute power. It is utterly wrong for my hon. Friend the Member for Ebbw Vale—and I still love him dearly—to discourage my right hon. Friend from doing the tough and right things. The Chancellor must not be given to feel that half the party is against him when the whole party must be behind him, because he will have some unpleasant things to do if we are to succeed. We must fortify him and say, "We do not care how unpopular are the things you do in the next year or so, because we appreciate that you must do them".
I urge my hon. Friends not to try to make my right hon. Friend water down the things that he must do to save the country. Give him a chance.

4.55 p.m.

Mr. John Smith: I thought that hon. Gentlemen below the Gangway opposite were mostly in favour of devaluation. They must recognise that devaluation could not have been successfully carried out without some such arrangement as the one we are discussing. I thought that the devaluers were having some sort of honeymoon with the Prime Minister; and whoever heard of a honeymoon without strings?
The party opposite has got us into real trouble; and then, miraculously, someone turns up who is willing to bail them out—and then hon. Gentlemen opposite are outraged at the thought of telling that someone what it is proposed to do with the money. It is usual, when asking a friend to guarantee one's over-draft, to give him some idea of why, and even some idea of how, one hopes finally to release him from the guarantee.

Indeed, to do so is a help; setting things on paper clears the head.
The I.M.F. is a friend, not a malevolent power bent on enslaving us. Despite the pejorative talk of some hon. Members about foreign bankers, the concern of the I.M.F. is that the world shall prosper, and the world includes us, and our ability to pay for imports from the world.
How can we possibly recover the confidence, let alone the respect, of the world if we keep behaving as if this were fairyland, as if all gold were fairy gold to be had simply for the wishing; and indeed as if this country were a fairyland of the type in the Norse Sagas, bent on self-destruction, as we are—attacking each other at a moment like this, attacking the business community which alone can get us out of our troubles? All internal debate on these topics is damaging to us abroad—

Mr. Maxwell: rose—

Mr. Smith: No. The hon. Gentleman has only just come into the Chamber. In any case, this is a debate, not an interview.

Mr. Maxwell: rose—

Sir Cyril Osborne: The hon. Member for Buckingham (Mr. Maxwell) should try to behave himself.

Mr. Smith: We need to show the utmost solidarity of purpose to the world if we are to get out of our difficulties. Therefore, although this is a Labour document, I say that the Letter of Intent is unexceptionable. It contains a little claptrap about internal Government borrowing, about the "sale of debt to the non-bank public", but there is not much harm in that. Apart from that, there are in it a few facts, some decisions, some hopes, and a ritual concession to the "Furies" in paragraph 3. There are only three references to consultation, two of which are really part of the same reference; and this consultation is of a sort which can be none other than of great help to us. I am sorry that the Government's policies obliged the former Chancellor to write this letter, but, reduced to it as he was, I congratulate him on its form and on its content.

4.59 p.m.

Mr. J. J. Mendelson: I shall take the liberty of ignoring the humorous


contribution made by my hon. Friend the Member for Bosworth (Mr. Wyatt), because we have very little time and this is a serious debate. That being so, one must not speak for too long. My hon. Friend will be on record for what he said about prescription charges and other policies that no doubt will find wide support among his colleagues in the Labour movement in the House and outside it. I leave him to deal with members of the party when they discuss his remarks with him in the future. I am more concerned with the policies of the Government and of the Opposition, and I want, first, to turn to the purpose of the debate.
The decision that the House has taken, and the policies that are alluded to in the Letter of Intent, will predetermine a great deal of legislation that will be introduced to the House by the Government. It may also predetermine some of the legislation the Government had intended to bring to the House, but may now decide not to bring to the House. There will, therefore, be very important positive and negative legislative consequences flowing from the Letter of Intent, and we would be failing in our duty to the House if we did not, at the earliest opportunity, examine the position.
I always listen with respect to the hon. Member for the Cities of London and Westminster (Mr. John Smith), but I fail to understand him when he reproaches us for even discussing these matters. If the hon. Gentleman seeks to sustain the doctrine that any discussion of matters that will affect the future of every citizen of the United Kingdom is damaging and should not take place, I doubt whether he will take his right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) with him in that proposition. However, I leave him to argue it out with his hon. and right hon. Friends.
We have to consider the policy that will he pursued by the Government, and the influence that the discussions that have taken place in the last fortnight will have on that policy. Therefore, the first proposition I put to my right hon. Friend the Chancellor of the Exchequer is that he must give a careful first opinion to the House and to the country on what these undertakings mean and how they will influence his future policy.
That does not only involve, as has been said, a future social services budget and

legislation for looking after those hardest hit by the increase in the cost of living consequential on devaluation: it involves the whole strategy of the Government's economic policy. One does not have to be so blind to the economic facts of life as has been suggested in some speeches about the release of economic resources in order to increase the export drive. We can agree that there must be a release somewhere—that can be appreciated, and is elementary economics—without necessarily supporting the policies to which the Government seem to have committed themselves in the Letter of Intent.
I am very sorry that my hon. Friend the Member for Heywood and Royton (Mr. Barnett) is not in the Chamber at the moment, because he spoke with such superiority, as though a new Keynes was addressing us on matters of economics. He was for a short time a student of mine at the College of the Rhine Army in days gone by, but I must say that I never taught him economics, only politics. He was speaking today on economics, so I do not accept any responsibility for what he said.
The importance of the point at issue is that if we have a position in which we wish to release resources from some sectors and make them available for the purpose of increasing the volume of our exports, we must decide where we shall start. Here, the policy of the Opposition comes very much into prominence. For some considerable time the Opposition have put forward a number of policies. They have urged the Government to cut public expenditure. This has nothing to do with the Letter of Intent. It would be wrong to say that the Leader of the Opposition and his right hon. Friends had to wait for what M. Pierre-Paul Schweitzer was saying in order to urge certain policies on the Government. They were urging conventional policies—Tory policies and the policies of the City of London—on the Government long before the negotiations started.
The Opposition demanded cuts in public expenditure, but it was difficult to discover from them where, in particular, the cuts ought to be. However, in other times they have said in rather more detail that we should cut the social services, and that we are spending too much on local authority house building.


The Opposition have put forward a whole series of proposals, but those proposals have been rejected time and again, first by the electorate and then by the House. The Government have been sustained by large majorities in the rejection of those policies.
I want now to turn to what I, at any rate, consider to be the most important aspect of this debate. It is that some of those self-same policies are now reappearing in the suggestions and conditions laid down by the international banking fraternity, and are in process of being imposed on the Government. This means that we have reached a position in which it seems virtually impossible for a social democratic Government, elected by a large majority—and past experience has shown it to be the case in other European countries—to pursue their policies successfully.
This has nothing to do with plots. It is not a deliberate plot. I do not accuse any right hon. Gentlemen opposite of having engaged in plots—I make that clear. But the economic philosophy represented on the Conservative benches is the philosophy that dominates the opinions of those people with whom our Government have to negotiate when discussing a standby credit, or any other credit. It therefore means that policies thrown out by this House are reimposed on the electorate by outside bodies. This is one of the most serious constitutional aspects we have to face in this debate. The consequence is that, whatever the electorate may say, even if the party opposite is defeated it always governs. Its principles are imposed on the Government even when right hon. and hon. Gentlemen opposite are in a minority in this House.
Let us examine the general proposition against the background of some of the policies urged on us. We do not want to spend too much time on what are and what are not conditions. Let us take it as read that everyone knows that before a standby credit is agreed a mission arrives from the I.M.F. and negotiations take place between its representatives and those of the Government.
But let us also remember—and here, again, I take issue with the hon. Member for the Cities of London and Westmins-

ter—that a large part of the money to he filtered into the funds of the I.M.F. has to be guaranteed by a number of very powerful central bankers—as the hon. Gentleman well knows. I do not seek to teach him elementary economics, but that fact was absent from his speech. When the decision was being taken in these committee meetings that the money should be supplied to the I.M.F. by these banks, British internal economic policy was discussed in minute detail. I have not time in this debate to give a full briefing on those discussions, but I am glad to see that I carry with me the hon. Member for Louth (Sir C. Osborne).
Let us now examine some of the points that were then discussed. One of the most important statements made by the Prime Minister and my right hon. Friend who has just resigned office as Chancellor of the Exchequer in the last fortnight was the hope—and to some it sounded more like an assurance than a hope—that we shall now be moving forward to an annual growth rate of 5½ to 6½ per cent. This is of decisive importance to the future of the country.
That proposition was bitterly attacked in one of these committee meetings. It was said: "This is illusory. It would be wrong if you could achieve it. You should not attempt to achieve it. There ought not to be an increase of 5½ per cent. or 6½ per cent." If that policy is now accepted we shall find ourselves in a position in which, for reasons that are not lodged in the judgment of our own Government but for reasons having to do with policies urged on us by bodies outside, we shall not go all out to achieve the increase in economic growth that the Prime Minister himself accepted in the House and the country. This has nothing to do with being able to fulfil what we say, or with being particularly inclined to be optimistic in our forecasts.
I wish that hon. and right hon. Members opposite would get away from their obsession about the Prime Minister as a personality for this three hours of debate. This is something which any Prime Minister and any Government might have to face, and it is well-known by right hon. Members on the Front Bench opposite. If we accept the framework of allowing conditions to be imposed because we want a standby credit, it may be that we shall be put into such a tight position


that our general expectations are called into question. I fear that the Government find themselves in that position at present.
I move on to another item which was discussed. There was a bitter attack on the Government's housing programme. The Financial Times this morning said that here are the places where cuts can take place and that as long as the Government do not decide on a very large cut in housing programme they do not propose to use the opportunities of devaluation at once. Once we have decided to release capital resources for export purposes we have to make that choice. Here we go to something on which the Opposition are always silent—our large defence budget and spending, not only overseas but at home. I am told that 800 British firms are engaged upon the production of Polaris.
If the problem is a technical one of releasing resources from one type of production in order to have more resources for export production, this is a case in point. Are we to say that this is the sacred cow of defence expenditure and, apart from the minor paring down which the Government have allowed, defence must never be touched, that we must depress our policy of economic growth and accept a large cut in the standard of living of working people but we must not touch nuclear weapons in order to relieve resources?
I speak not as a pacifist. It is well known that I have friends who are pacifists. I respect their position although I am not one, but if it is a question of having to make decisions, the Government have no right to say that we cannot look at the nuclear programme again, that it must go forward and employ the resources it is employing at present no matter what we have to do about increasing exports.

Sir Stephen McAdden: Will the hon. Member—

Mr. Mendelson: I do not think that it would be fair for me to give way, as other h Dn. Members want to take part in the debate.
The Letter of Intent gives very considerabi e power to the Managing Director of the International Fund. I welcomed the decision to announce the contents of

the letter and to publish it. I also welcomed the decision of the Government at this early opportunity to see to it that we at any rate retain the best possible position for devaluation. The judgment of the Government in these matters has the support of the House. What I do not accept is the provision in paragraph 16 of the Letter of Intent which said:
If, however, present policies should turn out to be inadequate, the Government is firmly determined to take such further measures as may be necessary to achieve these goals. If, in the opinion of the Government of the United Kingdom or the Managing Director of the Fund, the policies are not producing the desired improvement …
This gives equal status to the managing director of the Fund with the views of Her Majesty's Government. It is no good quibbling about what happens in these negotiations. I heard it said when I raised this point with a member of the Government, "Yes, we shall reserve our position to make our decision at the time". That is the kind of objection made about trade unions, that they consult and then take their own decision. This, surely, is not in the mind of Her Majesty's Government. It means that the managing director is given equal status in making decisions on Government policy with the Government themselves. This is an intolerable position. Many of us must take the earliest opportunity of showing the country that we do not accept it. There is no escape from that.
I move to what I think might be an alternative policy. We have been charged by hon. Members on this side of the House and hon. Members opposite with putting forward this critique of Government policy and of commitments entered into without suggesting alternatives. It is, therefore, my bounden duty, as the second speaker for this proposition, to point out the alternatives. There are very serious and very important alternatives. It would have been quite possible in this situation for the Government to say, "No, we do not accept some of these conditions because we do not agree with them". It must be remembered that in the situation in which negotiations take place people are always so eager to describe the weaknesses of the Government. They seemed to go out of their way to point out the weaknesses in which we found ourselves, but let it be remembered that in that fortnight there was a great


deal of heart-searching going on in Washington.
We were in a fairly strong position and the Treasury in Washington was most anxious that an agreement should be come to with the British Government because the position of the dollar was directly involved. We should have pursued that position. There would not have been a breakdown of the negotiations. The Fund had much interest in seeing and America was pressing it to see that agreement with the British Government was achieved. We ought to have mobilised in that situation, and we ought to mobilise now, a very large part of the dollar portfolio. This has nothing to do with confiscation. It is quite possible to mobilise it as a help to our reserves.
Many people are coming to this view in many different quarters. I shall quote a couple of sentences from a pamphlet published by Michael Shanks, who used to be one of the most prominent journalists on the Sunday Times, an organ not associated with my views. He said:
The dollar portfolio consists of private British holdings of dollar securities and assets worth about 3¼ billion more than our official reserves. If these were incorporated in the official dollar reserves our financial position would not only look a great deal better, but we would have more reserves available to meet sudden runs on the bank as it were Our credibility as a world banker would look much better.
Whether we accept the argument or not, this is a dismissal of the suggestion hitherto made. That has gone out by the window and now many experts are seriously considering this possibility. We should decide here and now on very large cuts in military expenditure overseas and at home. If the Government are not earnest in this, they have no right to ask us to support the legislation which will flow from the commitments they have entered into.
If it is to be argued that no serious cuts in defence expenditure are possible, they have no right to say, "We cannot do as much as we wanted to in the social services and in helping those who have been hard hit by the corresponding increased cost of devaluation". They have no right to say, "You must accept hard times, but we cannot seriously cut our defence expenditure".
This is at stake in this debate. As I have already said, constitutionally this is the most important subject we could discuss. When the legislation which will flow from these commitments comes before the House, and when the denials of things the Government wanted to do are debated in the House, we would have no right to say to the Government then, "You ought not to do it and we do not wish to support it", if we had remained silent today and had not taken this early opportunity to make clear our point of view on the disastrous consequences of some of the policies involved in our commitments in the Letter of Intent.

5.20 p.m.

Sir Cyril Osborne: I have promised to speak for only five minutes, not for 20 minutes, as the hon. Member for Penistone (Mr. Mendelson) did.
I want to make only a few brief points. First, I believe that the Government stand condemned in the country for trying to deceive the nation with half-truths. Secondly, the Prime Minister spoke only a half-truth when he said:
it was the international monetary community itself which came forward with facilities"—
of loan, whereas the Letter of Intent says this:
The Government therefore requests a standby of 1.4 billion dollars".
Thirdly, the Prime Minister said only half the truth when he said:
The loans from the central banks have no strings".—[OFFICIAL REPORT, 22nd November, 1967; Vol. 754, c. 1335.]
whereas the Letter of Intent promises a review in February, July and November and says:
If, in the opinion of the … Managing Director of the Fund, the policies are not producing the desired improvements in the balance of payments, the Government … will consult with the Fund".
This means that the international bankers, through the Managing Director of the Fund, will decide our economic destiny.
Fourthly, the new Chancellor of the Exchequer—I am glad that he is here, so that I can say this to him, I hope not unfairly—spoke only half the truth when he said this:
the Fund has not attached conditions to this credit.


The Letter of Intent is one mass of conditions. For example paragraph 7 promises
a reduction of home demand by about £750 million to £800 million below what would otherwise have been the case.
Surely that cut of £700 million to £800 million a year in home consumption is a savage enough condition.
Fifthly, if this £800 million a year is to be transferred from home consumption to exports, and if there is no real increase in national productivity, it is inescapable that our standard of living will have to be reduced by that £800 million a year.
Sixthly, even if this £800 million a year of resources are transferred from the home market to exports, the Government ca mot guarantee that they will be sold at a profit. To give them away in foreign markets below cost would impoverish the nation still further.
Seventhly, the new Chancellor of the Exchequer also said this:
this standby credit should in no way be a subsidy to our standard of living in this country, either now or in the future."—[OFFICIAL REPORT. 30th November, 1967; Vol. 755, cc. 743–47.]
I deeply regret that the new Chancellor has failed to make his supporters inside and outside the House, especially those below the Gangway, believe this horrid truth.
Lastly, I believe that the Prime Minister is guilty of trying to deceive the nation by keeping silent on the most important issue. Paragraph 12 of the Letter of Intent says this:
There is no criterion for pay increases related to changes in the cost of living.
In simple language, that means that there must be a long and savage wage freeze, despite a sharp rise in the cost of living. This is what the Government have accepted. The Prime Minister has funked telling the nation quite clearly that this is the price that this loan will impose upon the nation. Not one person in 10 million outside the House realises it and not more than one in 100 below the Gangway will accept it.

5.25 p.m.

Mr. R. B. Cant: We have had a great deal of eloquence this afternoon. Much of it has had considerable constitutional and moral overtones. I want to address my-

self to the very narrow thesis whether or not the Letter of Intent, to use the words of my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot), imposes intolerable shackles on the British economy.
I do not want to deal, first, as I might have done, with the question whether we needed a standby credit. My hon. Friend gave us an excellent exposition of why this is necessary to back up devaluation. I do not want to go into the past and explain that I have never been one who has been enthusiastic about devaluation, because I think that its repercussions are far more complex than is appreciated by most hon. Members.
What surprises me is the political immaturity which allows not only hon. Members opposite, but also quite a number of my hon. Friends, to believe that there could be a standby loan of this magnitude without conditions. This is a perfectly normal rule-book procedure to anybody who knows the constitution of the International Monetary Fund. Why it should take people unawares surprises me. It so happens that, because there was the calculated leak by the French, the Letter of Intent has had to be published. What surprises me is why some of my hon. Friends did not dig out the previous Letters of Intent and expose them to hon. Members opposite and give vent to their wrath on them.
I do not know why my hon. Friends always regard their wrath as being something which is particularly suitable to be given vent to on members of the Government. I can only draw the conclusion, having listened to my hon. Friend the Member for Ebbw Vale, that the present Labour Government—I expect applause from hon. Members opposite—are about the worst Government that this country has ever had. My hon. Friend had not a good word to say for them.
Political immaturity is demonstrated in another and more subtle way, in a failure to read between the lines, to accept that this is what we would expect it to be—a political document as well as an economic one. For example, its reference to "the growth of money supply" is quite intriguing, because I should imagine that this is the sort of thing that any 0 level student of economics might tear apart with the greatest of ease. To talk about the supply of money as a constant is to


accept the implication that in some way in 1967 the quantity theory of money in its crudest form is more relevant than it was 100 years ago. Perhaps this was written by M. Rueff himself. I am only surprised that my right hon. Friend the Chancellor was not required to say that the level of money supply in this country should be determined in accordance with the sacred principles of the gold standard and be determined, in effect, by our holding of our stock of gold. Surely my hon. Friends can accept that this was said by the Chancellor with his tongue in his cheek.
I should apply the same yardstick to this mystical £1,000 million—I see we have the American interpretation of billion now—net borrowing requirement. All right. We can interpret this in the most gruesome way. My hon. Friend the Member for Ebbw Vale quoted Mr. Paul Bareau. The Financial Times said that the cut to £1,000 million was "almost an irrelevance". I accept that. We have had so many lectures by economists in the House since 1964 that we all know that, if we want to decide whether an increase in the net borrowing requirement is inflationary, we have to take a whole lot of other factors in the national accounting framework into the calculation. Anyone knows that sort of argument.
Anyone will accept, also, that the £1,400 million could become £1,000 million as a consequence of the gentle processes of reflation itself. If, as we expect, there is growth next year, this growth will yield revenues which will cut the net borrowing requirement of the Government.
We now have a National Loans Fund Bill. A cynical publication like the Economist suggests that the advantage of that Bill will be
that the meaningless figure which used to be called the British Treasury's overall borrowing requirement will henceforth not be called anything at all so that the size of it will not scare foreigners out of their wits.
If those are its purposes, we need not bother with it.
I turn now to what might be regarded not as something one can read between the lines, but as more substantial objects of criticism in the Letter of Intent. The Chancellor may have to face some cuts in Government expenditure. I hope that he will bear in mind the words of my hon.

Friend the Member for Bosworth (Mr. Wyatt). He will never have more power at his elbow than he has in the period between now and the Budget. Certain things may have to be sacrificed. Perhaps the Financial Times is wrong in saying that the Industrial Expansion Bill is to be laid on one side, but, if certain things have to be sacrificed, then, to make possible this shift of resources, the Chancellor should do it.
I do not know whether it is acceptable or not, but I put this suggestion to him. Rather than put forward the bogus National Loans Fund Bill, let him realise that a step he could take would be to take some of the nationalised industry borrowing out of the Budget altogether, by throwing at least gas and electricity borrowing on to the market. I know that this would have certain repercussions. Because it would mean a higher rate of interest, it might force up certain prices. But let us never forget that this may be the direction in which the country has to go if its real cuts fall not on investment or on public expenditure but on consumption.
I know that my next suggestion is, perhaps, totally unacceptable to some of my hon. Friends, but I ask the Chancellor to consider seriously whether this is the moment to move from increasing the burden of taxation on individuals and companies and to move it to the poor old consumer. [HON. MEMBERS: "Hear, hear."] Not too much of that! I say that partly because I am a dedicated Common Marketeer. I believe that we must accept that, sooner or later, we shall have to move to a tax on added value.
The importance of this is simple. A great deal of our devaluation advantage will be eroded anyway as a result of various factors which have already been mentioned, but the fact that the Common Market countries are moving towards this form of tax on added value will devalue their prices against us. The Americans have already calculated that, by the beginning of next year, the Germans, through this shift, will have an added advantage of 2 or 3 per cent. on their prices.
Some of our cost advantage at the moment also derives from the system whereunder our social security contributions, falling directly on costs, are very


much lower than they are in Western Europe. As these increase, another factor in raising our costs, we shall again be in a difficult situation. I doubt that the Chancellor will think seriously about that.
We should accept that the condition under paragraph 11 of the Letter of Intent relating to saving, and so on, is something to be welcomed. If, because he feels forced to do it or because he does It voluntarily out of his own inclination, the Chancellor introduces something like an indexed bond, something for the average saver, not the wealthy savers who have the chance to invest in equities, and so forth—if he can create something which will offer a hedge against inflation and perhaps, some participation in growth, that will be something from which we shall gain.
Now, the conditions regarding exchange control. I am a bit concerned about this. As distinct from many of my hon. Friends, I should welcome more overseas capital investment because I believe that this is the only way for us to get to international company status. Unless we get to international company status, we shall have problems ahead. But what concerns me more is this. Because we are a reserve currency country, a trading currency country, a depository of hot money and the rest, it may be necessary for us to take certain steps, which the previous Chancellor would not take, to exercise some control in this field.
Few people know much about it. All sorts of suggestions are put forward, referring to 28-day rules such as the Swiss have, for instance. In fact, the Swiss do not have a 28-day rule. On the Continent, as we know from the O.E.C.D. Capital Markets Study, there are all sorts of interest arrangements, and these the Chancellor should study. It is one of the ironies of history that, under a Labour Government, the British economy has become more sensitive to the movement of volatile hot money as a result of the creation of the Eurocurrency market, which itself arises because of the American banking Regulation Q which refuses the payment of high interest on short-term money. This has laid us wide open. We hear a lot about sterling liabilities, but our non-sterling liabilities are now

£3,500 million. I hope that the Chancellor will look at that problem.
Our balance of payments has deteriorated in a secular sense. There is no doubt that that can be associated with the enormous growth of our overseas expenditure. But what overseas expenditure cannot explain is the fact that every time we have rapid growth we have a short-term deterioration within 12 months entirely due to the rapid growth of imports. I differ from my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). I think that within the Letter of Intent we could exercise control over this Achilles heel in the balance of payments by advance deposits for imports, by a simple extension of monetary policy which is not a contravention of exchange control. I hope that the Chancellor will look at that suggestion.
I am sorry that the debate has taken the turn that it has in some ways. But I hope that something fruitful will come of it.

5.42 p.m.

Mr. David Howell: It would be churlish of me, speaking from the back benches below the Gangway, not to begin by congratulating the hon. Member for Ebbw Vale (Mr. Michael Foot) for the part he has played with others in giving us the opportunity to have this debate, to hear the various diverting speeches, including the profound and utterly sensible speech of the hon. Member for Stoke-on-Trent, Central (Mr. Cant), and also to allow humble back benchers to look at some of the issues which too often in the past have been decided behind closed doors and by closed minds.
The remarkable thing about the debate on the Letter of Intent is the contrast between it and the heady, gay atmosphere in which the devaluation debate was conducted a fortnight ago. At that time, we heard from the benches opposite that there had been a wonderful technical adjustment, a financial change which had miraculously produced the easy solution. I think that one hon. Member opposite said that it had brought him out of agony and was of profound ideological importance for him and the Labour Party. Devaluation a simple adjustment of the exchange rate, had done all those things. It was no surprise, therefore, when we heard from the benches opposite the


sound or rejoicing and clinking glasses about the quick solution which would do it all.
The importance of the publication of the Letter of Intent and the opportunity to debate it is above all that it brings home to all those who thought that there was a quick and easy way that there is not. It brings home to them that far from devaluation being a technical gimmick which will cut the corners, unite the Labour Party ideologically, allow a 4 per cent. growth rate and so on, there are still severe and difficult problems ahead, that there is no instant solution and that no amount of cheering will bring one about.
That is a vitally important contribution for the debate to make, and it is ironic that the hon. Member for Ebbw Vale, who does not hold that view, should have promoted the debate. At the centre of the requirements in the Letter of Intent, requirements which all of us knew were necessary before devaluation, at the time and since, of the devaluation, is the question of Government spending. Several hon. Members have already spoken about that. I think that it was the hon. Member for Penistone (Mr. Mendelson) who said that there is an awful lot of loose talk on public spending, that it is too easy for international bankers and others to say, "Cut Government spending", and for politicians and hon. Members on both sides of the House to say that they will cut it, and delegate to other people how it can be done.
I agree that there is too much loose talk on public spending. I share the surprise of other hon. Members that the Letter of Intent for a standby credit of enormous proportions should talk of cutting Government spending in a relatively loose form. The former Chancellor of the Exchequer used to stand at the Dispatch Box in genial form and shake his head when there was talk of cutting Government spending. He said that it could not be done. So many programmes were fixed and decided far ahead—electricity, roads and other crucial investment programmes. "Is the hon. Member proposing that these be cut?" he used to ask. If we are to consider the implications in the Letter of Intent we must face up to cutting public spending,

because unless we do so we shall not meet the requirements of the Letter or of intelligent economic management, regardless of loans. We shall not deal with the central issue of control of our economy and with the basic requirement for the expansionary policy for which the Chancellor must be the first to wish.
The Letter confronts us with three issues about public spending. First, if I thought that the cuts which are now hinted at and proposed by the Chancellor would be panic cuts in our investment in electricity generating equipment and telephone exchange equipment, and major cuts in road programmes, I should be very dismayed. What use is a half-built piece of equipment, a half-built refinery, a half-constructed road? [Interruption.] If the hon. Member for Orpington (Mr. Lubbock) will contain himself for two minutes I shall make specific suggestions. I do not want any help from hon. Members on the bench in front of me at the moment.
If there were panic cuts in the forms of investment I have mentioned, we should not be facing the problem in the right way. Those programmes must go on. They were arranged a long time ago and are important for the future efficiency of the country. To cut them would compound the difficulties and make it more certain in future that we were back where we were before, with higher costs, and a still weak economy.
What may be possible, as the hon. Member for Stoke-on-Trent, Central, interestingly suggested, and what we should be debating, is not that the programmes should be cut but that the system of financing them should be totally changed. The hon. Member suggested that gas and electricity borrowing might be done on the capital market. We could examine that suggestion further; road investment could also well come from private resources. The roads are essential, but they could be paid for in a different way. [Interruption.] My hon. Friend says, "By tolls". Exactly. A similar idea could be thought out for telephones. Under the new public corporation to replace the G.P.O. they could be returned in greater part to private enterprise. Those would be ways of preserving the programmes, but ensuring that Government spending was cut.
Secondly, unless we can cut current spending, as well as capital, and specify the cuts, we shall not meet the requirements of the Letter of Intent. Hon. Members on both sides of the House have rightly painted to the need for far greater and wider use of charges. It must be right to reintroduce them for prescriptions. As the Plowden Report rightly said, there should be charges for nursery education. Without them, the result is that there is no nursery education.
The hon. Member for Penistone raised the controversial question of housing. Our attitude would be different if we thought that the millions of £s of housing subsidies really were eliminating homelessness and providing housing for those who need it. But many hon. Members know the difficult situation of being approached by young people with a couple of children who are unable to find a council house. I would perhaps agree that we should not touch the housing program me itself, but there is no doubt that the money given in housing subsidies is being spent in ways which do not achieve the result we want. That is why it is wasteful and there is room for improvement without disturbing the basic aims of the housing programme. The Letter of Intent does not specify what we intend to do but I hope that the Chancellor will he specific, because the sooner the Government are more specific the more possible it will be for us to contain the situation and improve it.
Then there is the question of those big cus in defence for which hon. Members opposite have called, and perhaps they are right. If the Government lead us to believe that there have been defence cuts, we must also be told what cuts there have been in commitments as well. It is impossible to imagine that the Government can maintain existing defence commitments, with troops scattered all over South-East Asia during the next decade, while still managing to cut defence expenditure. We need much more confirmation on this aspect.
But, of course, it is not merely a question of cutting programmes but of changing policies, carrying out the whole business of government very much more cheaply. There are a number of ways—and bankers, American, French or any other, or administrators of central Govern-

ment are the first to point them out and use them—in which we could carry out existing policies much more economically. This would produce savings in itself.
It is not beyond the bounds of policy that we could aim for a 5 per cent. cut in every main civil programme by the use of proper cost reduction techniques and cost cutting in central Government. That would make substantial contributions to assisting us. If properly organised, formalised and announced in this House, it would make a contribution to increasing efficiency of government and dramatically raising its quality.
Our public spending is widely regarded inside and outside the country as out of control. We have an antique system of control over it. This House has little or no say in the control of long-term Government expenditure. If we had had sufficient control in the past, there would have been no letter of intent, no devaluation, no loan, and we would not have had this debate. The problem would have been solved by the sensible control of public spending.

5.52 p.m.

Mr. R. T. Paget: I cannot help expressing a little sympathy with my right hon. Friend the Chancellor of the exchequer in his friends. I felt his embarrassment at the tabloid, Cecil King nonsense we had from the benches behind him a little earlier. Indeed, I shared his embarrasment.
The speech of my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) was really based on two illusions. The first was that we are discussing a loan. We are not. We are discussing a stand-by credit to operate as a deterrent against speculators. This is not money we are going to use.
Secondly, it is an illusion to say that this is an agreement. It is nothing of the sort. It is an expression of intention. These were the intentions of my right hon. Friend the new Home Secretary. I happen to think that they are not very good intentions, for reasons I shall come to, but they are not conditions, and I think my right hon. Friend the Chancellor is quite right.
If my right hon. Friend wishes to change policy—and in certain particulars I hope he will—it will be for him to go to Mr. Schweitzer and say, "I think another


policy is desirable and it is now up to you to say whether you wish to keep this guarantee on in view of those policy changes which I propose to make." Again, for reasons I shall go into, I think it would be unlikely but not very disastrous if Mr. Schweitzer said "No."
I therefore do not feel any undue pessimism about the Letter of Intent. We have had three absolutely disastrous years which have been piled, with an added momentum, on disastrous years before them. All we have done in those three years is to prove yet further that Conservatism does not work, because it is Conservatism that we took over.
These years have been unhappy ones for me because I am not talking with hindsight. I saw this disaster as an inevitable consequence. I said so at the time and my words were of course, merely discounted as the disgruntled bleatings of a disappointed man. Still, I am in a position to say now that every warning I gave has been justified by events and therefore it may be worthwhile just to rehearse the basic things which made me think this way, so that, perhaps they may not be repeated.
First, I come from a banking family and to me the recipe for disaster has always been for a trader to act as banker for his customers. We have seen proof of that time and again. Swedish Match and Kruger were a spectacular example. In the nineteenth century it was different for us. We had unlimited resources but now we are an ordinary trader and to try to be banker as well inevitably invites disaster.
Secondly, I am a planner and the moment one binds oneself to a certain level as first priority, one is putting planning outside one's control because the basic planning decision is always the size of the product and if a business takes in a committee of creditors to decide the size of its product then that business cannot plan for itself.
Immediately the Government gave absolute priority to the exchange rate, the National Plan went out of the window. That seemed to me to be obvious. I want to quote some words used by my right hon. Friend the Prime Minister which seem to express this very well—and he was writing, incidentally, in Tribune. He said:

For Toryism makes finance not the servant but the master of the industrial and trading community. Instead of using the selective powers of physical controls … the Tories attempt to solve economic problems by the crude instrument of finance which acts like a hydrostatic control, raising and lowering the volume of water in a tank. It is not selective … that is why too often the baby of full employment is thrown out with the bath water.
That article was in Tribune on 11th November, 1953, and it would be hard to find a better description of what has happened in these years.
At last, it seems to me, we have freed ourselves from this disastrous situation. We have freed ourselves from being crucified on the figure of 2·80. I hope that the level of 2·40 is not to be another sacred number and another last ditch for us to die in.
I should like to have the £ floating, available to change at any time, but I shall not now go into that argument. If we are to avoid this disaster in future and profit as we should be able to profit from devaluation, we have to do certain things. Here I entirely agree that we have to live within our income. This means reducing expenditure, particularly in foreign currency and on things we cannot afford. One of those things I would put as paying danegeld to Aden in the hope that they will not do something which they may not do anyway but which they will do if they wish. The second thing we should not do is to spend millions in Bahrain in order to build up for another humiliation similar to that we have had in Aden. The third concerns our nuclear weapons. They are incredible to our enemies, embarrassing to our friends and impress no one but ourselves and they are very expensive.
Lastly—and this will not please some of my hon. Friends—there is the question of Rhodesia. Our objectives may be impeccable—I take leave to doubt it, but they may be—but they are beyond our means. Lord Salter in another place put the cost, taking into account the effect on copper prices and the damage to our South African trade, as nearer £200 million a year than £150 million. This is a heavy and costly burden on our balance of payments.
If we are to put up our exports by £500 million, which is what is aimed at, the market in which we have to get at


least £200 million of that increase is South Africa. It is our second biggest market and by far our most expansive. We shall not get that increase by maintaining an interference which we cannot afford in business beyond the seas which is no longer ours anyway.
Another thing we have to do is increase exports and, as has been said, this will happen to a great degree following naturally upon devaluation. Devaluation will add to the profit margin of exports and if one increases the profit margin people go for exports. There has to be some restraint in order to ensure that there are available resources for this but when one talks about a £750 million to £800 million cut in home consumption I venture to say that that is masochistic nonsense.
That will not release resources. It will paralyse them. It is the kind of thing which will throw the country into strikes, go-slows, industrial conflict and restrictive practices. If we are to get increased resources for exports we have also to get increased enthusiasm and movement and we shall not get this by such economy.
Again, it is unrealistic to say that we must suddenly switch over our balance of payments to a £500 million surplus—which, after all, means a £500 million deficit for somebody else. I would rather see us balancing our income payments on a higher level. But if we are to do this, the other and most important thing is that we should protect ourselves from capital movements. That is the banking side of the business and such movements have proved disastrous again and again.
The reserve and trading currency use of our currency by others is the problem we have to deal with. That is what this credit is about. Such a situation means that our economic decisions have to be taken not according to our own requirements but according to the nerves or even the spite of other nations. To put ourselves in a situation in which our workers can be thrown into unemployment because Kuwait has a row with Israel and decides to withdraw its reserves from London is an absurdity that we should not tolerate.
No one else has these currency crises because no one else—except America, which has adequate backing—allows their currency to be used for this purpose. Certainly the cost of money to finance

this banking is more than the profits, even for America which succeeds in getting the money which it requires at an average of 1½ per cent., or 2 per cent. cheaper than we do and even the Americans, according to a Harvard investigation, find they lose money on the reserve rôle of the dollar.
What are the solutions? The ideal is an international currency to whom this would be transferred—good luck if we get it. The second is a complete and unconditional guarantee of sterling. That would have exactly the same effect as adopting an international currency. The sterling value would cease to be affected by our internal policies and we should use it as a trading currency, as everybody else who uses our currency, but that is too difficult an argument to go into now. An alternative to that would be simply a dollar guarantee which would make the £ the little brother of the dollar and an international currency for that purpose.
The third and most important solution of all is that, as on three previous occasions we should stop sterling being a reserve currency. We did that in 1914, in 1931 and in 1939. This has all been worked out and we worked it out in detail during the war. It means that sterling balances are usable only by consent of the Bank of England for ordinary trading purposes. I will not go into detail, but this is something which can be done and as an alternative to accepting a loan on unacceptable conditions it is something which we should do. We do not have this money for our own use. It is not financing anything, but is there solely to provide an assurance to other people who are using our currency for their purposes and that means that if the conditions are unsuitable to us, we ought not to have it.
I turn to the Letter of Intent. I said that it was not a condition. It is an expression of intention, I believe a disastrous intention. It expresses an intention to continue the same sort of disastrous policy which under two parties has brought us where we are. I cannot expect a declaration from a Chancellor of the Exchequer who has been in office a week—it is not fair—but let him at least say that he is free to change, that he was right when he said that it was not a condition and that he is free to re-think policies and to give us the hope of a new road


which may divert us from our assignation with disaster. Let him remember that this money is not being lent to us. It is being lent to the world to guarantee the use of our sterling not for our purposes, but for the purposes of others. We ought to give the Chancellor a chance to reconsider the new policies. This letter, for which I could not conceivably vote, is not his letter and he has the opportunity to set us on a new road.

6.8 p.m.

Mr. Iain Macleod: This is something of a House of Commons occasion, as it is the first time that the new Standing Order No. 9 has been put into operation. I think that the House and those who have listened to the debate will agree that we have spent a very worthwhile three hours.
This is not the occasion—and I intend to be very brief—for thunderous speeches from the Dispatch Box. The charge against the Chancellor of the Exchequer is that at his first appearance at the Dispatch Box in his new rôle last Thursday he was less than candid with the House. We shall listen with some interest in a few minutes to what he has to say, but I am bound to say that on the evidence produced so far I would find him guilty of that charge.
The charge was mounted from the right hon. Gentleman's own side of the House by the hon. Member for Ebbw Vale (Mr. Michael Foot), one of the most brilliant, if not the most brilliant, speakers in the House of Commons, and a man with an almost infinite capacity for self-delusion. This is the same man who made that excellent and passionate speech in favour of the Government in the devaluation debate immediately following my speech. I warned him and his hon. Friends more than once in the summer that they were being conned by the Government and by the Chancellor of the Exchequer of the day. The truth is that the former Chancellor, the present Home Secretary, was right in what he told the House on 24th July: we now have debt; we have deflation and we have devaluation. The lowering of the standards of the people of this country, of which the present Home Secretary then spoke, is both the consequence and now the policy of the present Government.
I come straight to the issue of the publishing of the Letter of Intent. I do not mind whether the Chancellor deals with this or not. It is a pity to make confidential and even secret communications public. I would dearly like to see the communications written in July, 1966, and I dare say that hon. Members opposite would like to see any other letters of intent which there may have been, but let us be quite clear why the present Chancellor decided to publish this Letter of Intent. It was not because he wanted to. It was because everything, or almost everything, had already appeared in the newspapers.
I have a cutting from the international edition of the New York Times of Thursday, 30th November, of an article by Mr. Clyde Farnsworth, and it is quite clear that if he had not seen the declaration of intent, at least he had a very detailed knowledge of what was in it. It includes this sentence:
Not since France needed international help in 1957 has a major industrial country been forced to give up so much sovereignty in economic affairs.
I do not know whether that is right, but it is the judgment of somebody who was clearly in Paris last week and very close to these events.
These terms have been described by the hon. Member for Ebbw Vale as intolerable shackles. Let me turn to whether the Chancellor was as candid as he should have been. He referred to only one paragraph in the Letter of Intent, paragraph 3:
The Government's main objectives of policy remain the achievement and maintenance of a strong balance of payments, together with a high rate of economic growth which will make for full employment.
It was the only paragraph from the whole of that paper which he could have read which would have attracted not only no comment, but general cheers from both sides of the House. He referred to it twice. Looking back, he must regret that he did not give any indication at all of the terms, of the four-monthly reviews and the other matters which were being asked of us.
On another and more detailed occasion—and I should like to debate this with him—he said:
… this does not involve any net deflationary policy"—


Later he said:
It does not in any way restrict my freedom of manoeuvre in arriving at the Budget next spring."—[OFFICIAL REPORT, 30th November, 1967; Vol. 755, c. 645–6.]
I simply do not see how the Chancellor can reconcile that with what he knew was in the Letter of Intent which he was to make public within a few moments, because paragraph 16 of the Declaration of Intent, the last paragraph, includes the most important, although the shortest, word in the letter. It says:
If, in the opinion of the Government of the United Kingdom or the Managing Director of the Fund"—
not "and", but "or"—then various consequences follow. I simply do not understand how the Chancellor can argue that there are no conditions; of course there are. There are conditions and there are understandings and the parties to it drafted [his Letter of Intent together. My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) has detected that the paragraph about the money supply was drafted in France. I have seen two comments suggesting that in fact it was drafted by the Chicago school of economists, and the hon. Member for Ebbw Vale said that it was international bankers' Esperanto.
But the salient fact of the charge, if it be a charge, remains: this is not a free will offering by ourselves. This is banker and client, perfectly properly—I am making no complaint about that—joining together to decide what the proper rôle of the client is to be in future. There are very few of us in the House who in one capacity or another have not had experience of that, and I have had experience from both sides.
Last Thursday I quoted an article by Mr. William Davis in The Guardian of last November when he quoted Pierre-Paul Schweitzer saying:
When we put all this money at your disposal, we just agreed with your Government on what was our common view of desirable policies in the United Kingdom.
There is no doubt that that is the position.
I see no reason why we should be naїve about it. Hon. Members from both sides of the House have said, and I agree, that we know that every banker, domestic, foreign, or international, discusses with his client what the client is to do with the money, and whether they are conditions, or strings, or intolerable shackles,

or whatever they are, they are there, and it is absurdly naïve of the hon. Member for Ebbw Vale and his hon. Friends to suggest that money is obtainable on any other terms.
At this point I want to quote what the Prime Minister said on 3rd October, 1964, just before the election, a quotation well known to the House. He said:
You cannot go, cap in hand, to the central bankers of Europe … and maintain your freedom of action, whether on policies, maintaining full employment here in Britain or even on social policies. The central bankers will, before long, be demanding that Britain puts her house in order.
Those are not my words, but the words of the Prime Minister before the election, and they are an accurate description of our present situation.
Part of the trouble—and the hon. Member for Ebbw Vale made this quite clear—was that hon. Members opposite believed the Prime Minister. I said that I would not make a tempestuous speech. I simply say quietly from this side of the House that we do not think that that is a particularly good reason. In the Ministerial broadcast these were the sorts of sentences which brought the hon. Member and his hon. Friends into the Lobby:
Last weekend the Government decided that we were not prepared to accept any solution which placed rigid limitation on the ability of our people and Government to solve our problems by our own exertions.
I suppose that the small print word there
is "rigid". He went on:
And that is why the international monetary community have rallied round with a display of formidable strength to back the operation. This backing is of course to deter the speculators, not for us to live on. And that's why it doesn't involve unacceptable conditions.
The small print word there, of course, is "unacceptable".
The Chancellor speaks last in this debate, as he usually does in debates when he can. It is a pity that in this as in some other debates he did not speak in the beginning and allow us to question him in the ordinary way. We have become used to it by now. It is always somebody else's fault; never his own—[Interruption.]
At the end of this debate the hon. Member for Ebbw Vale can, if he wishes, force a Division or, if the House allows him, he can withdraw his Motion. One of the difficulties—and the House as a


whole appreciates this—is that when a Motion is for the Adjournment that particular Motion can and often does, and has done in the past, mean very different things to different people often on the same side of the House. It is one of the procedural difficulties with which we are all familiar.
It has been said—and I have quoted evidence for it—that these conditions and strings are more detailed and more severe than any that have been imposed upon us before. That is probably so, but I would have little confidence in the I.M.F. or, indeed, in any other bank which did not have a most careful investigation and did not have whatever arrangements and understandings it thought were appropriate at the time.
This is the position as I see it. It is for the hon. Member for Ebbw Vale to decide what he wishes to do. He and his hon. Friends have voted against devaluation and they have voted for devaluation; they have voted against strings and tonight it may be that they will vote for strings. The question surely is whether it is right for the International Monetary Fund to impose conditions on a standby loan of such a vast size. If I were asked that question and tried to answer it, the only possible answer I could give would be: yes, of course it is. We are not arguing on the details; we are arguing whether it is right and appropriate that that should be done.
The hon. Member for Ebbw Vale asked on a number of occasions why the earlier speeches had been made in the devaluation debate. For a very simple reason—to get him and his hon. Friends into the same Lobby as the Government. That was the position then. But now we are considering the question whether, with this vast stand-by loan, there should be conditions. I think that there should, and I echo very much the words of my right hon. Friend the Member for Flint, West (Mr. Birch). I have been afraid, as I said in the devaluation debate, of what I have called the irresolution of the Prime Minister. I believe that the Chancellor of the Exchequer has a chance, with firmness, in the months ahead, at least, to go a long way to repair some of the damage that has been done. If he will show that firmness, whether he likes it

or not, he will get support from this side of the House. Although we genuinely think that he was lacking in candour last Thursday—and on reflection he must come to that same conclusion—because of the attitude I have expressed in relation to the International Monetary Fund, I would not think it right to oppose this Motion.

6.24 p.m.

The Chancellor of the Exchequer (Mr. Roy Jenkins): The right hon. Gentleman the Member for Enfield, West (Mr. Iain Macleod) has delivered a brief but not altogether untypical speech. The British economy in the past two and a half weeks has been passing through one of its most critical and decisive periods for a number of years past. In my view, it has been an even more critical and decisive, but by no means necessarily depressing, period from the point of view of the future.
What has the right hon. Member for Enfield, West contributed? On the first Monday he confined himself to asking my predecessor to resign; on the Tuesday he launched a bitter personal attack upon the Prime Minister; and today he has been almost exclusively concerned with trying to show that I, answering his Parliamentary Question within three hours of entering my new office, tried to mislead the House.
I make only two brief comments on that, for I have no desire to devote my first speech as Chancellor to a semantic argument with the right hon. Gentleman. First, I have heard of Ministers trying to suppress the truth by suppressing vital documents, but I have never heard of one seeking deception and, at the same time, making sure that the House and the country were immediately put in full possession of a document of a type which had never previously been published. To do that really would imply not cunning, but imbecility, and I hope that the right hon. Gentleman, for our first few encounters, will at least acquit me of that.
Secondly, I note the strictly personal nature of each of his three contributions to the debate on these great issues. Not a word of constructive suggestion, not a single shaft of light on to the future. Therefore, if I may, I will turn from his speech, because I want to try and deal briefly with some of the wider issues.
My right hon. Friend the Member for Ebbw Vale (Mr. Michael Foot)—[Interruption.] My hon. Friend knows that I would not attempt flattery with him. My hon. Friend the Member for Ebbw Vale, and various other hon. Members who have spoken on this side, are worried lest the I.M.F. standby credit means that, by devaluation, we have merely escaped from one straitjacket into another. I understand their concern, even though I do not share it. We have lived too long, under successive Governments, within an economic straitjacket. But they are wrong in seeing the essence of that straitjacket as being the decision to take a standby credit or the terms of the Letter of Intent. The straitjacket arises not out of that, but out of the facts that we have been spending abroad more than we have been earning, that 1967 will be our fifth successive year with a balance of payments deficit, that as a result we are heavily in debt, and that, again, under successive Governments, we have suffered eight major balance of payments crises in the past 20 years.
Those are the stark facts of the situation. No one surely believed that devaluation in itself could sweep all that out of the way. Certainly, not my hon. Friend the Member for Ebbw Vale who, in his speech on 21st November, said:
No one, so far as I know, has said that devaluation is a solution to all our problems. Nothing of the sort."—[OFFICIAL REPORT, 21st November, 1967; Vol. 754, c. 1164.]
My hon. Friend was quite right. The act of devaluation could not in itself begin to abolish our debts—indeed, it makes them more expensive—or to puff away our trading deficit. That, too, is still there, and may even increase slightly in the next few months as the result of the terms of trade worsening against us. Devaluation improves the competitive edge of our exports and, as a result, offers us the opportunity of achieving the export-led expansion which has eluded us for so many years past.
But even that does not come automatically. It depends—and again I quote my hon. Friend's speech of 21st November—on how we exploit it over the next 12 months. And it is upon the result of that exploitation that we can hope to build a new-found solvency, combined with full employment, combined with a securely based expansion. When we

have found it—but not a moment before—we shall begin to free ourselves from the constraints of the past. This is what I meant last week—I am sorry if I was not as clear as I should have been—by saying that the strings which counted came not from the I.M.F., but from the realities of the situation, and I am glad to have the opportunity of spelling this out in more detail today.
I turn now to slightly more detailed points. First, why do we need a standby credit? Certainly not to live on, to finance a continuing or even a growing deficit. This is the essential difference between this credit, which I hope we may never have to touch—I cannot be certain, otherwise we would not need it—and the sort of long-term loan, a subsidy to our standard of living, which we would have had to try to negotiate as an alternative to devaluation.
But we still need the standby. Devaluation is necessarily a hazardous process, involving a great upset to the world exchanges and considerable strain on the internal monetary system. And even with devaluation we are an island only in the most strictly geographical sense of that term. We are not an economic island. No great trading nation can be. We have the most vital interest in not upsetting world trade, and the methods by which it is financed. We have an even more vital interest in the stability of our currency at its new parity, and it would have been incredibly rash to have faced the immediate future without the confidence-giving backing of this standby.
What about the so-called "strings"? It is no doubt the case that we could not get the credit without a Letter of Inent such as my predecessor wrote on 23rd November. This is the practice in international finance, as the right hon. Member for Barnet (Mr. Maudling) and the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), who themselves wrote Letters of Intent, know very well. It is also the practice in arranging almost any form of financing. The lender wants to know the future intentions of the borrower for the management of his affairs. That is not unreasonable, and, indeed, it is in any event totally inevitable. But what is crucial is whether the borrower binds himself against his better judgment, and that my right hon. Friend the


present Home Secretary did not do. He set out in the Letter of Intent a series of propositions which he believed to be necessary to enable us to exploit the possibilities of devaluation, and I, on the brief studies which I have so far been able to make, do not dissent from him.
What are the main points? First, we say that we are aiming at an improvement in the balance of payments of £500 million a year by 1969. This means a surplus in the second half of 1968 of £100 million, that is, at the rate of £200 million a year, with a further substantial improvement thereafter. Do any of my hon. Friends, or does any hon. Member, think that that is too rapid an improvement? If they do, it is an amazing proposition, for it means that they want to pay off the debt at a slower rate, and to remain longer in the straitjacket.
Then we discuss how this is to be achieved, and let no one believe that it will happen automatically. This means a transfer of resources of about £750 million to £800 million, £500 million to improve the balance of payments, and up to £300 million to compensate for the change in terms of trade. As the export demand builds up, we have to make room for it in the economy. Some room has been made already, but almost certainly not enough, and this is intentional. We do not want to dig a hole and leave it empty. We want it to be there only when the export demand is ready to fill it, and we think that the Budget is likely to be about the right time for this further excavation. This is why, on the present very provisional assumptions, we think that it will be reasonable to restrict the borrowing requirements of the central Government to £1,000 million, which, I may say, is a higher figure than in almost every year since the last for many years past.
If the assumptions change, if, for instance, the economy were to sag, we could and would look at the matter again, and, in any event, we have given no indication of how we propose to achieve the objective, whether by cuts in expenditure, or by increases in taxation, still less by what cuts or by what increases. But the objective of shifting resources is essential. Without it, there just would not be room, without grave overheating, for the exports to build up.

We might produce a post-devaluation boom, but it would not be an export-led one, and thus, once again, we would be back with our old problems with the additional limitation that we had tried devaluation and failed to use it properly, and this we are determined to avoid.
Then we have the paragraph about prices and incomes. We say that we shall maintain the policy of the last White Paper, and we shall try to make its application still more effective so that increases in earnings shall not be greater than we can afford. Could we reasonably do less? I do not think so. Even if the I.M.F. had never been heard of, does anyone seriously contend that excessive wage and salary increases could not fritter away the competitive edge of devaluation over a year or so? And supposing we just sat back and allowed that to happen, what policy is it then proposed we should pursue at the end of the day? Severe restraint was highly necessary before devaluation. It is even more vital after it, and if only we can accept it in the short-term it will give us a richer reward than anything we have known in this economy for years past. It needs no I.M.F. to tell us these facts.
Then we have the proposal for three consultations with the I.M.F. during the coming year. There is nothing in itself derogatory about this. In some form consultation is a constant feature of international life these days. Last Thursday, while I was answering a Private Notice Question on the Letter of Intent, the United States economy was under scrutiny in the O.E.C.D. in Paris. Of course, if one is in debt the scrutiny is likely to be more frequent and more searching. This is a fact of life. The consultations which we have proposed are at perfectly reasonable times. In February, we shall be doing a post-devaluation review. In the summer we would, in any event, have been consulting the Fund under the normal Article 8 procedure which has long applied to all members of the Fund. In November, the credit will either be allowed to run out, or have to be renewed.
If any of my hon. Friends do not like these consultations, this, I suggest, is an added reason for their giving every support to the hard and unpopular measures which are necessary to make the fullest possible success of devaluation. Let them


support us in getting the balance of payments right by a substantial margin, and securely right, at the earliest possible moment. For that is the way, and the only way, to avoid having people looking over our shoulders.

Mr. Iain Macleod: I am not quarrelling with the conditions, and I have not done so, but there is one point to which I drew attention, and on which I would be grateful for the right hon. Gentleman's comments. I am referring to paragraph 16. It is not a question of the Government. The word is "or", not "and". In other words, the initiative can also come from the Managing Director of the Fund. Is this so?

Mr. Jenkins: The paragraph, which I have not before me at the moment, means exactly what it says; but it is consultation and certainly not instruction.
These various points and the other lesser ones which have been mentioned in no way add up to making the post-devaluation prospect a depressing rather than a stimulating one. A hard prospect, yes, because it will involve some immediate check in the standard of living and much personal sacrifice. But not a depressing prospect, because it offers us the opportunity of solving our difficulties by effort and not by wasted resources.
The rate of growth for the coming 12 months Mould be quite a bit above the 3 per cent. originally postulated by my right hon. Friend. And it should be 12 months, after the initial difficulties, of rising employment. During the first year these processes should not be too fast, otherwise they will undermine their own future, but the changes will be firmly in the right direction.
What we must be primarily concerned about, however, is not 1968, but 1968 as a foundation for the future. We need a strategy to ensure that expansion, when

it comes, will be securely based—[Interruption.] No, not even the 1969 election. We want something a great deal more sound and long-lasting than a pre-election improvement. We need a strategy to ensure that expansion, when it comes, will be securely based—not just a brief interlude of spree, but the beginning of the end of our debt-ridden past. That is my objective and the objective of the Government.

The announcement of devaluation on 18th November was obviously the end of a chapter, the end of a three-year chapter, in which my right hon. Friend the present Home Secretary had fought with immense courage and determination to preserve the previous parity of the £. But it was more than that. It was also, in my view, the end of a volume in which way back, before the beginning of the three years, we had been trying to live above our means both at home and abroad. We had not done either for ignoble reasons.

Much of our world rôle has been carried out for unselfish purposes and it is certainly not discreditable to try to give people the highest possible standard of living. But both have to be paid for. In my view, two rules should take paramountcy. At home, we must take our bonuses after we have earned them and not before, and abroad we must recognise that the influence of Britain will depend more than anything else on the strength of our economy here at home. This is what we shall be judged by; I think that this is what we should be judged by. The immediate future is bound to be hard. But, in the longer term, if only we can accept that, our prosperity can be more abundant and more securely based than anything we have known in this country for decades past.

Question put, That this House do now adjourn:—

The House divided: Ayes 17, Noes 231.

Division No. 7.]
AYES
[6.45 p.m.


Allaun, Frank (Salford, E.)
Griffiths, Will (Exchange)
Park, Trevor


Atkinson, Norman (Tottenham)
Hughes, Emrys (Ayrshire, S.)
Ryan, John


Booth, Albert
Jackson, Peter M, (High Peak)
Silverman, Sydney (Nelson)


Dickens, James
Jenkins, Hugh (Putney)



Ewing, Mrs. Winifred
Lee, John (Reading)
TELLERS FOR THE AYES:


Fletcher, Ted (Darlington)
Mendelson, J. J.
Mr. Ian Mikardo and


Foot, Michael (Ebbw Vale)
Orme, Stanley
Mr. Russell Kerr.




NOES


Albu, Austen
Gordon Walker, Rt. Hn. P. C.
Morris, Charles R. (Openshaw)


Alldritt, Walter
Gourlay, Harry
Moyle, Roland


Anderson, Donald
Gray, Dr. Hugh (Yarmouth)
Mulley, Rt. Hn. Frederick


Archer, Peter
Greenwood, Rt. Hn. Anthony
Murray, Albert


Armstrong, Ernest
Grey, Charles (Durham)
Neal, Harold


Bacon, Rt. Hn. Alice
Griffiths, David (Rother Valley)
Noel-Baker, Francis (Swindon)


Bagier, Gordon A. T.
Griffiths, Rt. Hn. James (Llanelly)
Ogden, Eric


Barnes, Michael
Hamilton, James (Bothwell)
O'Malley, Brian


Barnett, Joel
Hamilton, William (Fife, W.)
Orbach, Maurice


Baxter, William
Hamling, William
Oswald, Thomas


Beaney, Alan
Hannan, William
Owen, Dr. David (Plymouth, S'tn)


Bellenger, Rt. Hn. F. J.
Harrison, Walter (Wakefield)
Owen, Will (Morpeth)


Bence, Cyril
Hart, Mrs. Judith
Padley, Walter


Benn, Rt. Hn. Anthony Wedgwood
Haseldine, Norman
Page, Derek (King's Lynn)


Bennett, James (G'gow, Bridgeton)
Hattersley, Roy
Palmer, Arthur


Binns, John
Hazell, Bert
Pannell, Rt. Hn. Charles


Bishop, E. S.
Healey, Rt. Hn. Denis
Parker, John (Dagenham)


Blackburn, F.
Henig, Stanley
Parkin, Ben (Paddington, N.)


Blenkinsop, Arthur
Hilton, W. S.
Pavitt, Laurence


Boston, Terence
Hirst, Geoffrey
Pearson, Arthur (Pontypridd)


Braddock, Mrs. E. M.
Hooley, Frank
Peart, Rt. Hn. Fred


Bradley, Tom
Horner, John
Pentland, Norman


Brooks, Edwin
Houghton, Rt. Hn. Douglas
Price, Christopher (Perry Barr)


Broughton, Dr. A. D. D.
Howarth, Harry (Wellingborough)
Price, Thomas (Westhoughton)


Brown, Rt. Hn. George (Belper)
Howarth, Robert (Bolton, E.)
Price, William (Rugby)


Brown, Hugh D. (G'gow, Provan)
Howell, Denis (Small Heath)
Probert, Arthur


Brown, Bob (N'c'tle-unon-Tyne, W.)
Howie, W.
Randall, Harry


Buchan, Norman
Hoy, James
Rees, Merlyn


Buchanan, Richard (G'gow, Sp'burn)
Huckfield, Leslie
Richard, Ivor


Butler, Herbert (Hackney, C.)
Hughes, Rt. Hn. Cledwyn (Anglesey)
Roberts, Albert (Normanton)


Butler, Mrs. Joyce (Wood Green)
Hughes, Roy (Newport)
Robinson, W. O. J. (Walth'stow, E.)


Cant, R. B.
Hunter, Adam
Rodgers, William (Stockton)


Carmichael, Neil
Jackson, Colin (B'h'se &amp; Spenb'gh)
Rogers, George (Kensington, N.)


Carter-Jones, Lewis
Jay, Rt. Hn. Douglas
Ross, Rt. Hn. William


Coleman, Donald
Jenkins, Rt. Hn. Roy (Stechford)
Rowlands, E. (Cardiff, N.)


Concannon, J. D.
Johnson, Carol (Lewisham, S.)
Shaw, Arnold (Ilford, S.)


Conlan, Bernard
Jones, Dan (Burnley)
Sheldon, Robert


Corbert, Mrs. Freda
Jones, Rt.Hn.Sir Elwyn(W. Ham, S.)
Shinwell, Rt. Hn. E.


Craddock, George (Bradford, S.)
Jones, J. Idwal (Wrexham)
Shore, Peter (Stepney)


Crawshaw, Richard
Jones, T. Alec (Rhondda, West)
Short,Rt.Hn.Edward(N'c'tle-u-Tyne)


Cronin, John
Judd, Frank
Short, Mrs. Renée(W'hampton, N.E.)


Crossman, Rt. Hn. Richard
Kenyon, Clifford
Silkin, Rt. Hn. John (Deptford)


Cullen, Mrs. Alice
Kerr, Dr. David (W'worth, Central)
Skeffington, Arthur


Dalyell, Tam
Lawson, George
Slater, Joseph


Darling, Rt. Hn. George
Ledger, Ron
Snow, Julian


Davidson, Arthur (Accrington)
Lee, Rt. Hn. Frederick (Newton)
Spriggs, Leslie


Davies, Dr. Ernest (Stretford)
Lever, Harold (Cheetham)
Steele, Thomas (Dunbartonshire, W.)


Davies, G. Elfed (Rhondda, E.)
Lewis, Ron (Carlisle)
Stewart, Rt. Hn. Michael


Davies, Ednyfed Hudson (Conway)
Lomas, Kenneth
Stonehouse, John


Davies, Harold (Leek)
Loughlin, Charles
Strauss, Rt. Hn. G. R.


Davies, Ifor (Gower)
Lyon, Alexander W. (York)
Swingler, Stephen


Dell, Edmund
Lyons, Edward (Bradford, E.)
Taverne, Dick


Dempsey, James
Mabon, Dr. J. Dickson
Tinn, James


Dewar, Donald
McBride, Neil
Tuck, Raphael


Diamond, Rt. Hn. John
McCann, John
Urwin, T. W.


Dobson, Ray
MacDermot, Niall
Varley, Eric G.


Doig, Peter
McGuire, Michael
Wainwright, Edwin (Dearne Valley)


Dunnett, Jack
McKay, Mrs. Margaret
Walker, Harold (Doncaster)


Dunwoody, Mrs. Gwyneth (Exeter)
Mackenzie, Gregor (Rutherglen)
Wallace, George


Dunwoody, Dr. John (F'th &amp; C'b'e)
Mackie, John
Watkins, David (Consett)


Eadie, Alex
Mackintosh, John P.
Watkins, Tudor (Brecon &amp; Radnor)


Edwards, Rt. Hn. Ness (Caerphilly)
Maclennan, Robert
White, Mrs. Eirene


Edwards, William (Merioneth)
McMillan, Tom (Glasgow, C.)
Whitlock, William


Ellis, John
MacPherson, Malcolm
Wilkins, W. A.


Ennals, David
Mahon, Peter (Preston, S.)
Willey, Rt. Hn. Frederick


Ensor, David
Mallalieu, J.P.W.(Huddersfield,E.)
Williams, Alan (Swansea, W.)


Evans, Albert (Islington, S.W.)
Mapp, Charles
Williams, Alan Lee (Hornchurch)


Faulds, Andrew
Marks, Kenneth
Williams, Clifford (Abertillery)


Fernyhough, E.
Marquand, David
Williams, Mrs. Shirley (Hitchin)


Finch, Harold
Marsh, Rt. Hn. Richard
Williams, W. T. (Warrington)


Foley, Maurice
Mason, Roy
Willis, George (Edinburgh, E.)


Foot, Sir Dingle (Ipswich)
Mayhew, Christopher
Wilson, William (Coventry, S.)


Ford, Ben
Mellish, Robert
Woof, Robert


Forrester, John
Millan, Bruce
Wyatt, Woodrow


Fraser, John (Norwood)
Miller, Dr. M. S.
Yates, Victor


Freeson, Reginald
Milne, Edward (Blyth)



Gardner, Tony
Mitchell, R. C. (S'th'pton, Test)
TELLERS FOR THE NOES:


Ginsburg, David
Morgan, Elystan (Cardiganshire)
Mr. Ioan Evans and




Mr. Joseph Harper.

Orders of the Day — COAL INDUSTRY BILL

Considered in Committee.

[SIR ERIC FLETCHER in the Chair]

Clause 1.

(BORROWING POWERS OF THE NATIONAL COAL BOARD.)

6.55 p.m.

The Chairman: The first Amendment selected is No. 1—

Mrs. Margaret Thatcher: On a point of order. As we are clearly three hours later than we expected to be in starting the Bill, which is an extremely important Measure, involving about £330 million, I wonder whether you would give me leave, Sir Eric, to move a Motion to report progress purely to elicit from the Minister how far he expects us to get in these very new circumstances.

The Minister of Power (Mr. Richard Marsh): Further to that point of order. I hope that we will be able to complete the Bill this evening—[HON. MEMBERS: "Oh."] It is, as the hon. Lady the Member for Finchley (Mrs. Thatcher) said, a very important Measure, involving a great deal of money and, under the National Coal Board, the management of an important industry at a crucial period. I t is, therefore, important that the Bill should be through before Christmas.
Even more important, it already involves, in its social provisions, payments to about 2,500 men. It would be a great tragedy if this Committee were unable—it applies to either side: I make no point of it—in an issue involving human considerations of this magnitude, to see the Bill through to the end, even if it means tomorrow, mid-day.

Mr. John Peyton: I do not think that the Minister's argument is in any way relevant. He refers to pressing human and social considerations, but these can be dealt with tomorrow—

Sir Gerald Nabarro: When we are fresh.

Mr. Peyton: The complaint, justifiably, of my h on. Friend the Member for Finchley (Mrs. Thatcher) is that the House

of Commons is once again being treated by this Administration with nothing short of insolence. I have a good deal of sympathy—

The Chairman: Order. I am afraid that we cannot have an irregular debate on points of order—

Mr. Peyton: rose—

The Chairman: Order. We cannot have an irregular debate on points of order. Questions have been raised and answered under the guise of points of order for the benefit of the Committee to ascertain something with regard to the intentions about the proceedings of the Committee stage, but we cannot debate that matter in the guise of points of order.

Mr. Peyton: The point is this, Sir Eric, if I may put it this way. My hon. Friend the Member for Finchley asked whether, under these circumstances, you would allow her to move a Motion to report progress, and she then briefly gave the reasons. The Minister gave an irrelevant answer. This is the point.

The Chairman: I was hoping that that would have concluded the matter—

Mr. Peyton: rose—

Sir G. Nabarro: rose—

The Chairman: Order. Unless there is a Motion before the Committee we cannot debate this on points of order—

Mr. Peyton: With respect, Sir Eric—

The Chairman: Order. If it would be for the convenience of the Committee to have a short debate on a Motion to report progress—

Hon. Members: Yes.

Hon. Members: No.

Sir G. Nabarro: Where is the Leader of the House? "Kipping" again.

The Chairman: —that matter is something which, I suggest, the Committee might well consider at a later stage, but it is most irregular to have a Motion to report progress in order to ascertain the Government's intentions at the outset of the Committee stage proceedings. The normal course is to allow the Committee stage to proceed for a time and then,


perhaps, to ascertain what are the Government's intentions with regard to proceedings. We really cannot pursue this on points of order and it would not be in accordance with any precedent for me to accept a Motion to report progress at this stage.

Sir G. Nabarro: I am on an entirely different point of order. It will be within your recollection, Sir Eric, that, on 19th July, the House sat through until 8.12 a.m. the following morning debating the affairs of the coal industry, due not to any filibustering on this side of the House or on the other side, but simply due to the mismanagement created by the Leader of the House in putting that Order—

The Chairman: Order. The hon. Gentleman is obviously not speaking to any point of order. We had better get oil, I think.

Sir G. Nabarro: May I complete the matter, Sir Eric—

The Chairman: Order. It is obvious from the hon. Gentleman's remarks that he is not on a point of order. We had better get on. Mr. Peyton.

Sir G. Nabarro: On a point of order. I warned you, Sir Eric—

Hon. Members: Order.

7.0 p.m.

Sir G. Nabarro: I advised you, Sir Eric, that I was on a different point of order and the words which I uttered were merely a preamble. What I want to ask in one short sentence, is this: having regard to the notorious habits of the right hon. Gentleman, may we not have the Leader of the House here to rearrange business?

The Chairman: The hon. Member knows perfectly well that that is not a point of order. Mr. Peyton.

Mr. Peyton: I rise at a most convenient moment for myself. I am happy that this very tepid and civil protest which was started so rightly by my hon. Friend the Member for Finchley (Mrs. Thatcher) has just now succeeded in obtaining the presence of the Leader of the House—

Mr. David Griffiths: Get on with it.

Mr. Peyton: —because we are dealing here with major matters. I accept, of course, that it is no fault of his that another subject has been debated over the last three hours, but I say this to the Leader of the House. To ask the House of Commons to make the kind of precipitate progress which is demanded of it, to cover the Amendments on the Paper, is an exorbitant demand, and—

The Chairman: Order. We cannot go back on that. I must ask the hon. Gentleman to address his remarks to the Amendment which he is intending to move.

Mr. Peyton: That, believe it or not, is my intention, Sir Eric—

Mr. Thomas Swain: You could have fooled me.

Mr. Peyton: That is not terribly difficult.
I want to give a cordial welcome to the Leader of the House so that he may, in listening to my speech, gain some recognition of the immensity of the problems which we are discussing, and will be moved by the large residues of common sense which possess him to extend the time available.
I beg to move, Amendment No. 1, in page 1, line 10, leave out '£900,000,000' and insert '£850,000,000'.
This Amendment is very important. It seeks to give effect to the cry which my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro), I and others have been making for many years. The general point of principle here—we do not feel that we are in any way unreasonable in pressing it again and again—is that the House of Commons should resume its erstwhile control over the country's financial resources and should not make them blindly over to the Government or to their creature, in this case the National Coal Board.
I do not intend to make a long speech on this Amendment, but there are two questions which I would ask hon. Members carefully to apply their minds to. First, how reliable are the forecasts on which past policy has been framed and, therefore, how reliable are the forecasts on which the provisions of the Bill are


based? Second, how much confidence can we properly place in the National Coal Board?
On the first question, I would remind the Committee of various quotations from the mouths of Ministers. On 25th November, 1965, the right hon. Gentleman who is now Chancellor of the Duchy of Lancaster said, introducing a similar Bill:
… the provisions of the Bill are intended to provide the financial framework within which the industry can be healthy and viable.
He went on:
… it is necessary for the Coal Board to accelerate its policies for consolidating production in the economic pits and improving efficiency.
Later, he said:
I believe that, given the changes which we seek in the Bill, we will get a great viable industry which will maintain Britain as the most coal concentrated economy of any of the industrial nations."—[OFFICIAL REPORT, 25th November, 1965; Vol. 721, c. 779, 780, 793.]
None of these prophecies has come true. What has happened is that we have another, very similar Bill, and I am sure that I need not remind the Committee that the last operation was a financial one of some dimensions. It wrote off just over £400 million of the Coal Board's indebtedness.
Having heard those quotations, the Committee will he interested to hear what was said by the present Minister almost exactly two years later:
The measures outlined in the Bill are a deliberate distortion of the market trend to give coal the breathing space it needs to improve its competitive position …
What grounds does the Minister have for asking us to accept this assurance when such similar statements made by his right hon. Friend two years ago are now like torn-up paper about his feet? The present Minister also said:
But I am in no doubt at all that if we tell these men the truth"—
he can say that again—
and persuade society to meet the social consequences, the coal industry can enter the 'seventies in a sound position to play its part In future."—[OFFICIAL REPORT, 28th November, 1967; Vol. 755, c. 246–61.]
It is only fair to concede to the Minister that the forecast which he has given are not as rosy as those given by the Chancellor of the Duchy when he occupied his position. However, we are

more than justified in telling the Government that they have made these large and hopeful statements before. They introduced a massive financial measure to rescue the coal industry two years ago. That has not succeeded. Now they are back again and we find ourselves where we started, going through the same operation yet again. One wonders how the Minister can hold out well-founded hopes in these circumstances.
Indeed, it is worth while looking at the precise forecasts which the two right hon. Gentlemen gave in their turn. In November, 1965, the then Minister of Power said:
… I consider that it would not be prudent to count on a coal market in 1970 above the range of 170–180 million tons."—[OFFICIAL REPORT, 25th November, 1965; Vol. 721, c. 781.]
Two years later the present Minister had this to say:
With this extra help, coal demand in 1970 might be about 155 million tons, compared with total sales this year of 166 million tons".—[OFFICIAL REPORT, 28th November, 1967; Vol. 755, c. 252.]
The Committee will be in some difficulty in basing any conclusions on the forecasts which the Government now make, having in mind the fact that the forecasts of only two years ago have had to be so radically altered.

Mr. Edward M. Taylor: Is not the position even worse than my hon. Friend states? Is he aware that in the Prices and Incomes Report No. 12, published in February, 1966, it was indicated, even at that time, that the estimate was 170–180 million tons? Those figures were, therefore, given less than two years ago.

Mr. Peyton: I am grateful to my hon. Friend, who has kindly drawn attention to the restraint with which I am approaching the matter. The Government's forecasts made less than two years ago have been so falsified that it is difficult for any hon. Member to take seriously the forecasts now being made.
7.15 p.m.
How far is the House of Commons justified in placing further confidence in the Chairman of the National Coal Board and the Board which serves under him? Personally, I do not have that measure of confidence because for far too long


Lord Robens pinned his faith—indeed, he nailed it to the mast—on the figure of 200 million tons. Although he had many opportunities to accept a more realistic figure, he adhered to that one, in my view disastrously for the coal industry.
Neither have I any confidence in diversification. In the N.C.B.'s Annual Report and Accounts I cannot find sufficient information about how the subsidiaries and diversified activities are progressing. We can he certain that the work done by the N.C.B. in producing smokeless fuels has been exceedingly expensive. The remarks—I will not weary the Committee by reciting them—in the Annual Report on the subject of home fires, room heat and so on are uninformative and lacking in candour.
The attitude of the Chairman to other fuel industries is profoundly unhelpful, particularly to gas and electricity, two industries which have given substantial help to coal in the past. The Chairman's conduct after the Aberfan disaster—

Mr. Swain: On a point of order. I am following the hon. Gentleman's line of argument attentively and I am not asleep this time. I am wondering when the hon. Gentleman will be asked to address his remarks to the Amendment. I cannot see any words in the Amendment about the Chairman of the N.C.B.

The Deputy Chairman (Mr. Sydney Irving): Order. I have not yet heard the hon. Gentleman say anything out of order.

Mr. Eric Ogden: Further to my hon. Friend's point of order. If the hon. Gentleman was not technically out of order, is it not unusual for an hon. Member to direct the whole of his argument and attack not on the basis of an Amendment but on a Member of another place?

The Deputy Chairman: The noble Lord is the Chairman of the N.C.B. I shall pay particular attention to the remarks of the hon. Gentleman, but so far nothing he has said has been out of order.

Mr. Peyton: I am approaching this problem on two counts. The first is that the Government's forecasts are not sound and that they have been proved to be

unsound in the past. The second is that I do not have the confidence in the Chairman of the N.C.B. and his Board that I feel we should have before reposing such financial powers and confidence in them.
I was referring to Aberfan. I do not wish to say anything about that terrible disaster, but I do wish to say something about the Chairman following it. I wish to briefly quote—

Mr. Michael McGuire: On a point of order. How in heaven's name can alluding to Aberfan—although the hon. Gentleman said that he did not want to allude to it—have anything to do with the Amendment?

Sir G. Nabarro: Further to that point of order. Is it not a fact that the N.C.B. is charged with important responsibilities for safety in connection with spoil heaps and that a part of the money to be voted under the Bill will be devoted to this purpose? Is not any reference to Aberfan therefore completely in order? [Interruption.]

The Deputy Chairman: Order. I hope that both hon. Gentlemen will leave matters of order to the Chair. I am listening carefully to the remarks of the hon. Member for Yeovil (Mr. Peyton). When or if he gets out of order, I will be quick to tell him so.

Mr. Peyton: It must be unique in the history of hearings before courts or tribunals that a counsel should say of his principal client:
I invite the Tribunal to say that nothing in his evidence assisted the Tribunal at all and that the position is exactly the same as if he had given no evidence at all.
That does not fortify me with confidence in the Chairman or the Board.
Why, in the very tender situation in which the coal industry finds itself—with the anxieties felt by hundreds of thousands of men—did the Chairman see fit, just before the publication of the Government's White Paper, to say that there would be jobs for only 65,000 men by 1980? I hope that I do not embarrass the Minister by saying that I agree with him that no one can tell what will be happening in 1980 or how many jobs there will be.
That contribution of the Chairman was profoundly unhelpful. One is left with


the unanswered question: why did he do what he did? I agree with the remarks of the hon. Member for Bolsover (Mr. Neal) on Second Reading, when he said that it was disastrous that this feud should exist between the Minister and the Chairman of the N.C.B. I profoundly agree with that comment, which was greatly restrained.
I have sought in these remarks to avoid using strong or excessive language. However. I do not believe that it would be right for the Committee, in dealing with sums of money of over £300 million, either to ignore the real difficulty of accurate forecasting and to fail to point out the danger of founding huge investments on forecasts which may prove to be wholly false within a couple of years. We must also point out that there are, and have been for some time, grounds for unease and lack of confidence in the N.C.B. I hope that none of my remarks will be taken in an unduly partisan sense, but I feel it right that I should have made them tonight.

Mr. E. Shinwell: It may or may not interest my colleagues on these benches to learn that I am strongly tempted to support the hon. Member for Yeovil (Mr. Peyton), though for reasons quite different from those he gave. I understand the hon. Gentleman, and I understand his opinions and the opinions of hon. Members opposite. Hon. Members opposite dislike nationalisation, they dislike the National Coal Board, and they obviously have very little enthusiasm for its Chairman.
On Second Reading last week, we debated, not this Bill but the White Paper. It was the White Paper that became the foundation for most of the arguments then adduced. I ventured to take a rather different line. I made a very short speech. It lasted only 13 minutes—it was, perhaps, the shortest speech in that debate. I did so because I was advised that as many hon. Members wished to address the House it was preferable that speeches should be rather briefer than usual. I make no promise on this occasion.
This is a very important Amendment. Indeed, it is the essence of the whole argument. If, for example, the Committee decided not to concede further borrowing powers to the National Coal

Board, but to curtail those borrowing powers by several millions of pounds, as the Amendment proposes, it would affect the future of the coal mining industry. It might also affect the future of the Chairman of the National Coal Board. It is therefore an important Amendment, and upon our decision on it depend all the other Amendments: settle this Amendment, and the rest is comparatively easy to follow, to argue and to decide.
In last week's debate I ventured on behalf of my miner constituents—indeed, I had express instructions from them—to put a few questions to my right hon. Friend the Minister. In doing so, I remarked that I might not be able to stay to hear the Parliamentary Secretary's winding-up speech—which was to take place some time after 11 o'clock—but that I would read in the OFFICIAL REPORT what he had to say. I did so. And disappointed as I was during the debate at the line of argument adduced, at the irrelevancies—and, over and above all that, concerned as I was with the disappointment and frustration in the industry—I was even more disappointed when I read my hon. Friend's observations.
I submit, with respect, that I would be in order if I were to repeat very briefly the questions I put to my right hon. Friend on that occasion. I repeat that these were not my questions but questions addressed to me by the people who matter—the miners themselves; miners, living in a condition of insecurity and unaware of what was to happen.
My first question was: how many pit closures are likely to take place in 1968? That question obviously concerns miners not only in my constiuency but throughout the coalfields. Not a word was said in that debate about the possibility of further closures, and no answer was furnished by the Minister to my question. We are therefore still in the dark. We are unable to tell our miner constituents how many closures are likely to take place in the next 12 months—

The Deputy Chairman: Order. I am afraid that the right hon. Gentleman is turning an Amendment debate into a Second Reading debate. I must tell him that his remarks would be much more appropriate on an Amendment to Clause 2—which, in any case, deals with


pit closures. I therefore hope that he will defer his remarks in that respect to that Amendment.

Sir G. Nabarro: On a point of order, Mr. Irving. We are debating a Clause which deals with the extension of the Board's borrowing powers. The amount involved is an additional £200 million, and we are seeking to reduce that amount. Inherent in all these arguments is the length of time the money will last, and I say, with great respect to the Chair, that the right hon. Gentleman the Member for Easington (Mr. Shinwell) is only dealing with the important matter of how long the money will last. Surely that is in order.

The Deputy Chairman: The hon. Gentleman is incorrect in this respect, that we are dealing with an Amendment which, in effect, reduces the borrowing powers stipulated in the Clause. This limits the debate to the question of the reduction. It may be more appropriate to talk about the total borrowing powers on the Question "That the Clause stand part of the Bill", but the effect of the Amendment is to reduce the debate, rather than allow a stand-part debate.

Mr. Shinwell: My purpose is to say that unless I have from the Minister a satisfactory reply to the questions I put on Second Reading, and to which I received no reply, I am opposed to further borrowing powers for the National Coal Board. Therefore, I am in order, Mr. Irving—or at least it seems so to me.

The Deputy Chairman: If the right hon. Gentleman puts it in that way, he is certainly in order. What he cannot do is to elaborate on the questions he put on Second Reading.

Mr. Shinwell: How right you are, Mr. Irving. I naturally accept what you say.
I also asked the Minister what assurance he could provide of alternative employment before the closures took place. Is not that an important question? My miner colleagues here will agree that it is a most important question. The subject is on the lips of almost every miner who is afraid of redundancy. There was no answer to that, except to refer us to the Board of Trade but the Board of Trade did not take part in that debate. So we

require another debate for that purpose. Unless I get a satisfactory answer, I am even prepared to vote against the provision of further borrowing powers for the National Coal Board, because in my judgment unless we can get satisfactory replies the Board does not deserve to be furnished with further borrowing powers.
7.30 p.m.
Ever since the Coal Board was created—and I was responsible for its creation on behalf of the Attlee Cabinet when I was Minister of Fuel and Power—the Board has been seeking to modernise the coal mining industry. I am sure that I am within the knowledge of my miner colleagues when I say that hundreds of millions of pounds have been expended in modernisation. The most modern machinery, the most modern equipment and the most modern methods have been deployed at great expense, and many of the pits upon which vast sums of money have been expended for this purpose have been closed. I am not prepared to provide the Board with more money for modernisation for this purpose unless I have an assurance that these rapid—much too rapid—closures are to cease.

Mr. Alex Eadie: Is my right hon. Friend aware that the people who owned these pits at the time when he carried out the nationalisation have been paid unforeseen profits for them?

Mr. Shinwell: That is another point, but it would be completely out of order to discuss it. The question of spending money on modernisation is not out of order. I am very much concerned about providing Lord Robens and his colleagues on the Board with further borrowing powers, many more millions for modernisation, unless I have an assurance that the money will be used not only for the benefit of the country but also for the purpose of conferring certain social and industrial advantages on the men employed in the industry. I received no answer to the question I put on that occasion.
We also ought to know what the Board's intentions are. For what are they to use this money? I have suggested that the Board intends to use it for modernisation, but it may use it for some other reason. We ought to know what the reason is before we vote this


money. In Second Reading a great deal was said about productivity, greater and higher productivity. No doubt many of these millions we are to vote for the Board will be used for the purpose of that form of modernisation which leads to higher productivity. I want an assurance that higher productivity, sometimes described as greater efficiency, should not cause greater unemployment among miners. These are very simple issues. These are the kind of questions which concern t he miners themselves. They are the kind of questions which are talked about in working men's clubs and at the street corner. We are entitled to have satisfactory assurances on these issues.
I refer to the nature of the answers I received during the Second Reading debate. I have no personal feeling against the Parliamentary Secretary, any more than I have against the Minister, but I was astounded when I read what he had said. I have heard a great many platitudes in this House and clichés galore, but this was the most classic example of clichés which I have read for a long time. I am almost afraid to read them out. I do not want to do the Parliamentary Secretary any harm, but some of these statements were in the form of jargon straight from the Civil Service.

Sir G. Nabarro: Bureaucrats.

Mr. Shinwell: This is the way civil servants talk, but I am quite satisfied that some of my miner friends in my constituency would describe this as Cockney jargon. I dislike this language intensely. I shall not bother to read it out for my colleagues can read it for themselves. If they go over that ground they will discover that not a single question relating to the conditions of the miners, their insecurity and their sentiments and how they feel, was answered. Perhaps that was not the fault of my hon. Friend. Perhaps he had nothing very satisfactory to say. If so, we shall have to go on asking these questions.
I do not want to proceed further on this line because I get into a bad temper over this business. Why not? I go to my constituency and I am accosted by miners at meetings and other functions and sometimes when I visit some of the working men's clubs. Oh, the language they use! I am certain that in this

respectable assembly it would be completely out of order and quite unparliamentary.

Mr. McGuire: It would liven it up.

Mr. Shinwell: My hon. Friend the Member for Ince (Mr. McGuire) suggests that if I used the language it would enliven the proceedings, but that is not my intention. I feel strongly about this matter, not only because of what my miner constituents say to me and the advice they give me, but because I have an idea of what the coal mining industry could produce and I am afraid of what might happen in future. I hope that my right hon. Friend in replying to this part of the debate will at least give one answer. That is an answer to the first question I put—how many pits are likely to be closed in the next 12 months? How many will be closed in the County of Durham, how many in the North-East and elsewhere, and in Wales—

Mr. Emrys Hughes: And in Scotland.

Mr. Shinwell: —and in Scotland. We are entitled to know. Could we also have an assurance that before any pits are about to be closed the men will be consulted and have an opportunity of expressing themselves? I know that there have been consultations with the National Union of Mineworkers, but somehow that does not percolate down to pit level. The men are entitled to have some information about this because it affects their future. I do not want to proceed further. It may be that I have been slightly out of order; but it is sometimes worth while being out of order in this assembly to enable one to express one's sentiments and do a good turn for one's constituents. I hope that, as a result of what I have said, even if I have been somewhat harsh and aggressive in my expression, my right hon. Friend will make an effort to reply to the questions I have put.

Sir G. Nabarro: I rise to support my hon. Friend the Member for Yeovil (Mr. Peyton) and I wish at once to allude to the speech by the Minister in introducing the Second Reading of the Bill. He said, as reported in column 249 of the OFFICIAL REPORT:
I am trying to make an uncontroversial speech."—[OFFICIAL REPORT, 28th November, 1967; Vol. 755, c. 249.]


Whoever heard of an uncontroversial speech on the coal industry? I shall not emulate, nor seek to emulate, the example of the right hon. Gentleman. I intend to make an intensely controversial speech, not necessarily in the same vein as the right hon. Member for Easington (Mr. Shinwell), though we have a good deal in common, about the future of coal mining in Britain and the use of coal as our basic indigenous fuel in preference to other alternative fuels, notably imported fuels.
I shall address myself, first, to the chronic inaccuracies of forecasting by the members of the Coal Board. Never in the history of national or international finance has there been such a disgraceful exhibition of miscalculation and wastage of the nation's finance as has been manifested by the Coal Board in the past three years.

Mr. Emrys Hughes: The hon. Gentleman has forgotten Ferranti.

Mr. Swain: And Blue Streak.

Sir G. Nabarro: If the hon. Gentleman wishes to interrupt, I shall give way.

Mr. Emrys Hughes: The hon. Gentleman has had a serious lapse of memory. Private enterprise has made enormous miscalculations resulting in great damage to the public welfare. My immediate response was to mention Ferranti—and that is God's truth.

Sir G. Nabarro: I shall not call in aid the Almighty, but I shall reply to the hon. Gentleman, and I hope that he will remain silent while I complete my argument. The Ferranti case involved £4 million, and it was a claim in respect of excess profits. My complaint against the Coal Board involves loss and wastage in excess of £100 million, 25 times as great as the alleged surplus or excess profits in the Ferranti case.

Mr. Emrys Hughes: And on what capital?

Sir G. Nabarro: There is this further notable distinction. Ferranti operates at a profit. The Coal Board has operated at a chronic and continuing loss.

Mr. Swain: The hon. Gentleman has forgotten, as he is apt to do, our ex-

Perience with Blue Streak. The original estimate was £60 million. It ultimately cost £600 million of taxpayers' money, and it never flew once.

Sir G. Nabarro: I shall deal with all these matters on an appropriate occasion. The losses by the Coal Board, which are the nub of the Amendment, are vastly in excess of all these other matters, even in aggregation.

Mr. Woodrow Wyatt: rose—

Sir G. Nabarro: A moment or two, and then I shall give way. I always give way to the hon. Member for Bosworth. I wish to finish this part of my speech tracing the financial course of events since 1965 and the Coal Industry Act of that year. Under the 1965 Act, the borrowing powers of the Coal Board were set at a maximum of £750 million, being increased under that Act by approximately £250 million. The Minister then said that the additional borrowing powers would last the Board for all purposes until March, 1971. He now asks the Committee for more money in December, 1967. The degree of Ministerial error was 40 months, or three and one-third years.
The average businessman in private enterprise might make a mistake in calculation of capital expenditure equal, in chronological terms, to one month in budgeting one year ahead. But here is the Coal Board spending £250 million of additional borrowing provided under the 1965 Act by December, 1968, instead of by March, 1971. Am I guilty of hyperbole in suggesting that this is the most chronic and disastrous wastage of public funds which the House has ever witnessed?

Mr. Wyatt: I take it that the hon. Gentleman objects because he regards these losses as a sort of subsidy to the coal industry. Why does he not object similarly to the much larger subsidies paid to agriculture, and paid for precisely the same reason, to save imports? We do not want to import more foodstuffs than necessary, and we do not want to import too much fuel oil, do we?

Sir G. Nabarro: I knew that the hon. Gentleman, who has ants in his pants, would jump in too early. He sits for a


mining constituency. He ought to know the facts. He ought to be able to tell the miners in minute detail about the finances of their industry, but he is ignorant of the facts. Since 1965, until this year, there have been no losses on current account by the coal industry. The industry has been operating roughly on a basis of no profit and no loss.
7.45 p.m.
Where has all the money gone? It has gone probably in the fashion shown by the right hon. Member for Easington, in pouring Good money after bad, into the modernisation of pits now to be shut down, into an industry which is declining very rapidly—too fast and too far, for my liking.
We are asked to put another £200 million into the industry. How long is this amount to last? It is to last for about 16 months. That is all. Perhaps, the Minister will confirm that when he replies. I see the Parliamentary Secretary nodding dissent. He has already been castigated by his right hon. Friend the Member for Easington, who spoke of clichés and unsatisfactory answers. I shall not add to the evidence given by the right hon. Gentleman, but there was no better example given in earlier rebates on the coal industry of the fashion in which the House of Commons is fobbed off by bureaucratic and inexact answers than the Parliamentary Secretary's answer on 18th July last to my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph).
At 8 o'clock in the morning, after an all-night sitting, my right hon. Friend intervened to say:
The Parliamentary Secretary has not dealt with the point that the Minister's predecessor, in November, 1965 expected that £750 million would last through to 1971. Is the hon. Gentleman saying that it is just the extra 12 million tons of stock which explains the change in the Minister's prediction?
To that the Parliamentary Secretary gave this grossly inconclusive and futile reply:
No. The point is that, if there is a different figure and a higher rate of run-down, as has occurred since 1965, that leads to greater expenditure over a shorter period. Without going onto detail, that is the general answer on that point."—[OFFICIAL REPORT, 18th July, 1967; Vol. 750, c. 2027–8.]
What in the name of glory does that means? Everything the hon. Gentleman said in his reply might have accounted for

a few million pounds, nothing like £200 million.
The Coal Board has been running at no profit and no loss for two years. Where has the £250 million gone which we voted two years ago, in the autumn of 1965? It has not gone into revenue account to offset losses. It is all hushed up in the accounts and not precisely accounted for, but I believe that the right hon. Member for Easington is nearer the truth.
I turn now to the future. I have expressed my lack of confidence in the financial budgeting of the Board. My lack of confidence in the Ministerial parent has always been manifest. Any Minister who says in a coal debate that he will make an uncontroversial speech destroys any vestige of confidence which I might have had in him.
The right hon. Member for Easington did not do his homework. Had he done so and read the White Paper, "Fuel Policy", in the great detail in which I read it he would have found in paragraph 131 a detailed account of what the sums of money in the Clause are to be devoted to in the next 16 months, which is the period of their expenditure. This is of the greatest importance if we are to economise in public funds. The paragraph says:
1. Outstanding long-term borrowings March, 1967 … £610 million".
£610 million. That is the cumulative long-term borrowing figure at the time of the presentation of the White Paper. It goes on:
2. Additional long-term borrowings 1967–68 … £90 million".
That makes it up to the £700 million the expenditure of which the Minister has virtually authorised already.
It continues:
3. Provision for day-to-day and seasonal fluctuations in temporary borrowings for working capital … £70 million.
4 Net capital investment in collieries and ancillary activities"—
that is highly suspect—
in 1968–69 to 1970– … £60 million.
5. Additional coal stocks … £25 million.
6. Provision for deficits … £50 million.
7. All other contingencies … £45 million".
The Committee should give its attention to those last three items, which make up a total of £120 million out of the


additional sums to be voted under the Clause. Is it the Ministerial intention that coal stocks shall continue to rise unremittingly, through a further unsold surplus of coal? If so. the figure of £25 million budgeted in the White Paper divided by 100s. 7d. per ton, which is the 1967 average price of coal at the pit head, would account for an additional 5 million tons of undistributed stocks. As there are at present 28 million tons of undistributed stocks, the Coal Board is evidently budgeting for 33 million tons, to which must be added a further 20 million tons this autumn of distributed stocks, or a total of 53 million tons of coal unsold and unused at a given period. I suppose that that is in the next 12 months, which is approximately within the ambit of the financial provisions.
Is the Minister telling the Committee that during the next 16 months the Coal Board will lose £50 million? The Bill goes only 16 months forward According to the White Paper, there is provision for deficits of £50 million. Will the House of Commons countenance the Coal Board's losing money over the next 16 months like a drunken sailor? I believe that that remark is strictly in order and very appropriate, having regard to contemporary circumstance.
Only 1½ hours ago the Chancellor of the Exchequer was talking about our passing through a critical period; only a week ago the Government were calling for the utmost economy in public expenditure. This is public expenditure. Is the Committee to vote £50 million tonight for Coal Board losses in the next 16 months?

Mr. Marsh: I hesitate to interrupt the hon. Gentleman in mid-flight. But I am not sure where he gets his 16-month point from. The Bill is perfectly clear that we are talking about March, 1971. What is possible is that in the meantime a Minister might come back for an extension of the order. I am sure that the hon. Gentleman would be the first to think it right and proper.

Sir G. Nabarro: Sixteen months is nearer the truth. The Coal Board has run through £250 million in two years, with a declining industry. It is now proposed to continue to run the industry down at the same rate. If £250 million

was lost in two years, the £200 million will last for about 16 months. It may be 20 months, but it will be roughly within that range. I do not accept that it will last until 1971. It was the Minister's predecessor who estimated in 1965 that the £250 million would last until 1971, and the Board is already out of money after just two years.
But the point I am trying to impress on the right hon. Member for Easington and all the coal-mining hon. Members opposite, who give general support to the Bill, that only £60 million of the £200 million is to be spent on genuine colliery improvements and increases in productivity and efficiency. Nearly all the remainder of the money is to finance additional stocks of coal, to finance losses by the Board, and for ancillary purposes, which is a pretty disgraceful state of affairs having regard to the dismal and inaccurate record of the Board in financial budgeting on earlier occasions.
I want to ask the Minister one or two more points before I leave the financial provisions. There can be no doubt that he is budgeting for an increase in coal stocks. At what point do we stop putting coal on the ground? At the end of the year there will be, say, 30 million tons of undistributed stocks. That is worth £160 million at book value and it is locked up capital. The coal cannot be sold in this country, and it goes on increasing. We have nothing but pious hopes from the Ministry that at some future, indeterminate date he may reduce these coal stocks.
In my Second Reading speech he pooh-poohed my peroration—[HON. MEMBERS: "Hear, hear."] I am sorry to be alliterative, but that is excellent alliteration. Repetition is to follow. [An HON. MEMBER: "Marvellous."] It is nice of the hon. Gentleman to say that I am marvellous. I want to finish this sentence. What is the Minister to do with all that coal? He cannot sell it in this country. I asked him what action was being taken to secure additional export markets. He pooh-poohed the question and said, "Oh, of course, immediately after devaluation a Coal Board team was despatched to Europe." Hon. Members opposite asked me if I did not know that coal contracts in Western Europe were long-term contracts. But


none of the money under the Clause would be wanted if the liability of 160 million tons of coal stocks were eroded and finally liquidated.
How long is the coal to remain there? More pertinent, how long has much of it been there? Looking back over my records, I believe that 10 million tons has been lying on the same tips for many years—unsold, deteriorating, poor in quality and not worth the value in the books.
I wonder whether the Coal Board's accountants are compiling this figure at the lower cost or market value. I doubt it. None of the money under this Clause would be wanted if the Minister displayed some energy in the disposal of these excessive stocks of unsold coal and if it cannot be sold at market price my advice is simple and straightforward.
The Americans are putting coal into Europe today at under 100s. per ton c.i.f. We,t. European ports. It would be cheaper for this nation to "flog" 20 million tons of its unwanted coal on our tips to European customers at, say, 80s. a ton post-devaluation rather than keep it longer on the ground in this country against some future hypothetical demand for the coal.

Mr. Lubbock: Is not the hon. Gentleman aware that, in many European countries, the coal industries are faced with the same difficulties as we face here? Does he think that they would take kindly to the dumping of British coal at a time when they are trying to find jobs for their own miners?

Sir G. Nabarro: The hon. Gentleman is naive if he believes that I have not looked up the answers to all these posers before I started. Of course the European coal mining countries have surpluses of bituminous coal but this year the Americans have landed in Western Europe 21·7 million tons of Coal from the United States.

Mr. Edwin Wainwright: Under long-term contracts.

Sir G. Nabarro: No—under contracts mostly expiring by next May, some of them expiring in January and some in February. The hon. Member for Dearne Valley (Mr. Edwin Wainwright) scoffs at a Tory Member who is notoriously a

friend of every coal miner in Britain. I cannot understand him. I am trying to demonstrate to him how to make the coal miner's job more secure by selling the products of his labour. The hon. Member scoffs at my salesmanship activities.

Mr. Edwin Wainwright: Does the hon. Gentleman realize—I am certain he does—that, when there were coal stocks under the Tory Government of 50 million tons, there were no sales on the Continent because of certain reasons, which he knows—that our industries did not want our coal to be Sold abroad at a cheap price to our competitors.

Sir G. Nabarro: The hon. Member is talking the most drivelling rot. He does not understand the most elementary economics of the fuel and power industries. In the years in which the Tories held fairly high stocks, of about 20 million tons, it was in relation to a mining output in excess of 220 million tons. Under the present Government, 174 million tons were produced last year and 165 million tons this year. The Tory Party mined the coal. The Labour Party has let the coal miners down. I want to know the answer to the future of these stocks from the Minister, because my question is short, succinct and valid. None of the money under this Clause would be wanted if he dealt with the 160 million £s tied up today in surplus coal stocks.

Mr. Edward M. Taylor: I almost always agree with my hon. Friend, but on this occasion how could he justify selling coal to the Italian and German steel works at 80s, a ton when steel works in Scotland have to pay at present 130s, a ton? Why not have the experiment of selling more by lower prices here?

Sir G. Nabarro: My hon. Friend reinforces my point. The Government would do far better to sell this surplus coal to Scottish steel works at a lower than cost price in contemporary circumstances rather than pay all the costs of keeping it in stock. I say to my hon. Friend that the Government would be far better advised financially to follow a policy of that sort than building advance factories in Scotland and the North-East which are not being occupied.

Mr. G. Elfed Davies: Perhaps the hon. Gentleman will explain


one thing. During the Second Reading debate, he wanted to sell the coal to Europe at 88s. a ton. Where has the 8s. difference gone?

Sir G. Nabarro: Before the hon. Gentleman bursts out in a cacophony of cackling, perhaps he will read on in my speech. I said, in the vernacular, "flog it". I will wager that there is not a coal miner in this Committee who does not know what "flog it" means. "Sell at the best price"—that is what "flog" means. Get 88s. per ton if you can; if not, get 80s. But even 80s. C.I.F. West European ports would be a far better return than leaving these 30 million tons of coal lying on the ground for an indefinite period ahead.

Mr. Shinwell: Hear, hear.

Sir G. Nabarro: The right hon. Gentleman says, "Hear, hear." This is the nub of the Bill. Compensation to miners is not the nub of the Bill. The major part of the Bill is the borrowing powers and the Tories have views on finance as well as Labour Members sitting for mining constituencies. That magnificent writer on fuel and power economics, Mr. Christopher Tugendhat, energy editor of the Financial Times, wrote this morning:
The Central Electricity Generating Board has already been waiting for some time for a reply to its application to build a nuclear power station at Seaton Carew near Hartlepool, and there is no sign of an official announcement.
I want that power station to be fired by the coal produced in the Durham coalfield. I have proclaimed that loud and clear all over the country as the friend of the coal miners, however much it makes the hon. Member for Dearne Valley (Mr. Edwin Wainwright) writhe.
I say to the Minister that we have waited for long weary months while this controversy over the Seaton Carew power station has gone on. It will involve the Coal Board in a certain amount of capital expenditure if it is coal-fired. May we have an answer before the Bill leaves this House? Is the station to be coal-fired or nuclear-powered, because a part of the expenditure entailed, if it is a coal-fired will fall on the National Coal Board and, therefore, within the provisions of Clause 1? Will he give us an answer? If he will not give us an answer, perhaps he will say that he will not.

Mr. Marsh: rose—

Sir G. Nabarro: It is nice of the right hon. Gentleman to get up.

Mr. Marsh: I was merely twitching.

Sir G. Nabarro: I must say that the contempt with which the right hon. Gentleman responds to the legitimate demands from the miners in Durham and the non-miners in South Worcestershire ought to bring the opprobrium of the House on his head. Were I a Minister responding to coal miners, I would try to understand their legitimate fears in present conditions and the greatest psychological blunder the right hon. Gentleman could make would be to build a nuclear power station on a major British coalfield. I hope that he does not, because coal would be far better for the purpose. I hope that he will give an answer to my question before the Bill leaves this House.

Mr. Shinwell: May I direct the hon. Gentleman's attention to Amendment No. 30, standing in my name and the names of some of my hon. Friends, which deals precisely with this question?
In Clause 6, page 4, line 11, at end insert:
Provided that the Minister may withhold permission for the construction of an electricity generating station using any fuel other than coal, and shall take into consideration the social and economic effects on a particular area or district caused by the reduction in the number of persons employed in the coal industry within a thirty mile radius of the site of the aforesaid electricity generating station.

Sir G. Nabarro: I am grateful to the right hon. Gentleman, as always. I am not sure whether Amendment No. 30 has been selected but I will not trespass on your generosity, Sir Ronald. I see that you have become a little impatient with me. I merely respond by thanking the right hon. Member for Easington and I hope that we may be favoured by the selection at a propitious moment of that Amendment, so that we may discuss the question of this power station in greater depth and detail.

Mr. Eric Lubbock: The hon. Member has been very patient and I am grateful to him for giving way again. I remind him that his name is on an Amendment seeking to reduce the borrowing power of the Board. Later, we are to deal with a Clause providing


£45 million in subsidy to the Central Electricity Generating Board, other generating boards, and area gas boards for the use of coal where they would sooner use some other fuel. That is Clause 6. If the hon. Gentleman's suggestion is accepted and Seton Carew is a coal-fired station, the C.E.G.B. will require to be paid any difference in generating costs by the Minister and the £45 million we are to vote under Clause 6 will probably have to be doubled.

Sir C. Nabarro: That is a spurious argument from Orpington. The short answer to Orpington is, of course, that, in the case of Seaton Carew, generating costs per kilowatt hour of electricity from a major coal-fired station using 500 megawatt turbo alternators would be cheaper than the use of nuclear fuel.

Mr. Lubbock: Absolute nonsense.

Sir G. Nabarro: The hon. Gentleman continues to bawl, "Absolute nonsense" at me. He is entitled to his view. I profoundly believe to be true what I have said.
With those few comments of a preliminary nature, I will return later in our debates, after the Minister has answered seriatim each of the points I have put to him, I invite hon. Members on both sides of the Committee to join my hon. Friend the Member for Yeovil (Mr. Peyton) and myself in the Lobby if we do not obtain satisfaction. I want to know, in a time of extreme stringency in capital and finance, how this huge additional sum of £200 million is to be expended. Alternatively, I would bring the Minister back to the House for financial accountability earlier than 16 months ahead.

8.15 p.m.

Mr. Swain: I shall not say, as I did last time, that it gives me great pleasure to follow the hon. Member for Worcestershire, South (Sir G. Nabarro). Listening to him and the hon. Member for Yeovil (Mr. Peyton), I was reminded of Evelyn Waugh's words:
When one is in politics one must inevitably associate with some frightful people.
Having listened to the hon. Member for Worcestershire, South make a speech based mainly on other people's interventions, those words have been more than confirmed for me.
I shall address myself to the Amendment and I warn the hon. Member for Worcestershire, South, the hon. Member for Yeovil and my right hon. Friend the Member for Easington (Mr. Shinwell) that if they want answers from the Minister then, judging by the way they have been talking this last hour and a half, they will perhaps have to wait until 5 a.m. to get them, because I hope that every one of my colleagues speaks on this wrecking Amendment. If we had done the same as those hon. Members—so-called—in the last debate, and read the Minister's reply in HANSARD next day instead of waiting to hear it, the Bill would not have had a Second Reading. It would have been counted out by the Tories.
We stuck it, and if they are prepared to stick it until one o'clock tomorrow afternoon, so shall we in the miners' group. If they want the answers, they will have to stay with Tom Swain, M.P. and the other members of the miners' group until we have finished debating the Clause. If they like, they can do what they did on Second Reading and go home when they have made their speeches and leave the "slaves" to carry on the debate.
I hope that the Committee will reject the Amendment out of hand. It is clearly a wrecking Amendment.

Mr. Edward M. Taylor: indicated dissent.

Mr. Swain: I wish that hon. Members who disagree would get up and do so instead of mumbling like a crocodile with the toothache.
All I regret about the Clause is that the total figure is not higher. If it is reduced by £50 million, as the Amendment suggests, the Coal Board's total liability will be spread over a smaller number of pits, which will mean more money in the long term to finance the liabilities. I wish that the Minister had categorically told the House that the Government would write off a tremendous amount of the Board's capital liability. My right hon. Friend who is now the Chancellor of the Duchy of Lancaster wrote off £415 million in 1965. Assuming a gradual decline in mining, the benefit of that £415 million write-off


would have been considerable, but circumstances and events beyond the control of Lord Robens or anybody else overtook the industry.
I must applaud Lord Robens for the magnificent case which he put up in his effort to substantiate the argument that the industry could be fully viable. Incidentally, his estimates of manpower and tonnage in mining in 1980 were no wilder or more ridiculous than the estimates of the Government of the hon. Member for Yeovil in 1955, when they said that the industry should produce 240 million tons by 1970. The industry's capital liabilities today are as heavy as they are as a consequence of its capitalisation to produce 240 million tons under the terms of reference given to it by Tory Ministers of the time.
The industry is still suffering from the effects of that over-capitalisation and of the forecasts of the Tory Government in 1959, or as expounded in the "Plan for Coal" of 1955. They were hopelessly wrong to the tune of nearly 60 million tons of coal. Hon. Members opposite criticise Lord Robens, but he only did the sums from the figures provided by his teacher, and if the teacher is to criticise the pupil for arriving at the wrong equations from the teacher's figures, I wonder where we are getting.
The hon. Member for Worcestershire, South made his hypocritical statements about being the friend of the miners. As I have said before—God shield me from my friends if he is one of them. Our old friend "Cross-bencher" will have two more allies to link up in his column on Sunday, my right hon. Friend the Member for Easington and the hon. Member for Worcestershire, South. What a team to go to bat on!

Mr. Shinwell: My hon. Friend did not make observations of that kind when, after the miners group had decided on a course of action, he associated himself with me and other hon. Members representing mining constituencies to bring pressure on the Government to withdraw the White Paper.

Mr. Swain: I am glad my right hon. Friend has interjected. We called on the other miners not to bring pressure on the Government, but to make a commonsense

case to the Government to explain why the title of the White Paper should be altered, and my right hon. Friend's constituents have had as much pleasure from the results of those negotiations as have those of North-East Derbyshire or any other mining constituencies.
My right hon. Friend has mentioned the closed shop on other occasions. In the mining group we are a closed shop. We have put down many Amendments and I hope that my hon. Friends will speak to them. The miners group's discussions are independent because we are not inhibited by the language of university dons; we do not suffer from the inconsistencies of the economists; our brains do not have to undergo the clinical diagnoses of the doctors and we do not have to sit and listen to the lectures of the teachers whose job mainly was to put sums on the board for kiddies after someone else had provided the answers. Occasionally, we have had to suffer the interferences of junior Ministers, but they are necessary and we have been able to tolerate them at most times. I am glad that we are an independent group.
Other wrecking Amendments are suggested, but this, as the hon. Member for Worcestershire, South said, is the nub of the whole argument. Without the total amount provided by Clause 1, the Coal Board cannot operate its proper fuel policy. That is why there is such an attempt to wreck the Clause. Our Amendments would be useless if by any mischance this Amendment were carried. I appeal to my hon. Friends, when at about three o'clock in the morning the Division is called, to troop through the Lobby and give the hon. Member for Worcestershire, South the biggest tab dusting he has had in his life.

Mr. Edward M. Taylor: The speech of the hon. Member for Derbyshire, North-East (Mr. Swain) was one of the most unfortunate of the evening. This has been a useful and constructive debate so far and in describing this as a wrecking Amendment the hon. Gentleman was extremely unfair to my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) and my hon. Friend the Member for Yeovil (Mr. Peyton) who made serious and constructive contributions.
There was only one thing on which I agreed with the hon. Gentleman.

Mr. Swain: The only thing about which the hon. Gentleman agrees with me is the date.

Mr. Taylor: The hon. Gentleman referred to those who are to be slaves this evening. It is unfortunate that we should have to discuss this matter so late, because it may not be possible to give these issues the consideration which they deserve. I know that the Minister specialises in late nights. I remember that we had a few of them on the Steel Bill when we had a Parliamentary Secretary falling asleep. I am sure that the present Parliamentary Secretary will not do that, but we ought not to discuss these important matters at so late an hour.
Every speaker so far has referred to £200 million of additional borrowing power. If it were only £200 million, my hon. Friends and I would still object to such an amount without the normal discipline of returning to the House, but a careful reading of the White Paper shows the figure to be more than £200 million. This is made clear on page 52 when the White Paper shows that the Coal Board is nearing the statutory limit of £750 million because of seasonal circumstances. Obviously, stocks fluctuate and to that extent borrowing powers or limits fluctuate. If we take a limit of £750 million at a time of the year when stocks are extremely high for seasonal reasons, asking for a further £200 million is to that extent asking for a little more leeway.
But that apart, from our experience of the Coal Board we know that to give £200 million borrowing powers to take the Board up to 1971 is allowing far too much leeway. It would be utter madness at this time, and I emphasise "time". The hon. Member for Derbyshire, North-East gave the impression that we were trying to curtail the industry's necessary capital investment, but that is not our invention. We do not want to provide a blank cheque for capital investment and borrowing powers when so many of the Board's decisions and estimates have proved to be wrong or inaccurate.
I was influenced a great deal by Report No. 12 of the Prices and Incomes Board. Hon. Members may have reservations about the Incomes Board

and its rôle in fixing wages and determining wage policies, but we can all agree that its reports have been of a high quality. Certainly Report No. 12 on coal prices is extremely interesting.
Paragraphs 62 and 63 of that Report say some alarming and damaging things about the Coal Board. It talks about its investment policy and says in effect that terrible mistakes have been made, wonder whether it is wise for us to give complete freedom on borrowing powers up till 1971 when we see what actually happened in the years which are referred to.

8.30 p.m.

Mr. Eadie: Will the hon. Gentleman say what mistakes have been made?

Mr. Taylor: I was coming to that. It is in paragraphs 62 and 63. I will give the hon. Member the Report after the debate is finished. It is a good Report.

Mr. Eadie: I think the hon. Gentleman will remember that I made a speech on the same Report. He should tell the Committee that that Report demonstrates that it costs more to distribute coal than to produce it.

The Temporary Chairman (Sir Ronald Russell): Order. Not unless it is related to the borrowing powers of the Bill.

Mr. Taylor: The point which the hon. Member has made is correct, and the final conclusion of the Report is that there should be an inquiry into distribution prices.
On the question of borrowing powers, I wonder whether it is wise to give such substantial borrowing powers when we see the record of investment outlined in paragraph 62:
First, investment has proved excessive in relation to market demand.
When it talks about the estimates it says:
These have proved to be over-estimates. By basing its estimates on present prices and costs the Coal Board has failed to make due allowance for the changing competitive position of coal. The industry, as a result, has been faced with a burden of depreciation and other fixed costs higher than the market warranted.
It also mentions:
In order to secure a better control over investment in the future we consider that the


Government should assume greater responsibility for identifying and examining more critically the vital assumptions on which the forecasts of yield on new investment are based and should equip itself technically to do this.
I know that the Minister has made some very real attempts to get more information. Probably one of the difficulties that we have had in the coal industry is that we have not had all the information.
When we are considering borrowing powers, surely one thing which the House should do is to make sure that from time to time we have an opportunity to review the situation in the coal industry, to review investment policy, and see just how accurate are the estimates which have been made. Quite frankly, if we are to give what amounts to a blank cheque on borrowing powers up to 1971, even if this estimate is accurate—[Interruption.]—know that my hon. Friend has stated his opinion, and I respect his opinion, because he is usually right. In fact, his record of making estimates has been extremely accurate.
Even if we assume on this one occasion that the Government's estimate be right, are we going to give them this carte blanche up to 1971?
Mention is also made in this Report of the Board's estimates about 1970. This was published in February, 1966. It says that the result will not be as the Board hoped at 200 million tons, but probably 170 to 180 million tons. When we consider 170 to 180 million tons being mentioned in February, 1966, and then we have the Government coming along with a White Paper in which they say they are doing the coal industry a favour in trying to get to 155 million tons, I think it is crystal clear that the estimates which have been made have been based on wrong assumptions or have been very wild or else perhaps have been deliberately optimistic on the part of the Coal Board and have been unnecessarily accepted by the Minister.

Mr. Albert Roberts: When the hon. Gentleman makes reference to a Labour Government, will he bear in mind that we were all led astray—including the hon. Member for Worcestershire, South (Sir G. Nabarro)—during the early 1950s, when we were controlled by a Conservative Government.

We were led to believe that we should consume 250 million tons of coal by 1965. One can well understand the reason why the Coal Board to some extent has been led astray by such a Government over the period of 13 years.

Mr. Taylor: In the early 1950s I think I was still at school. I certainly was not in the House.

Sir G. Nabarro: I was here in 1952 and 1953, the period to which the hon. Member for Normanton (Mr. Albert Roberts) is referring. That was before nuclear energy and before the oil programme launched by my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd). The 250 million tons that the hon. Member for Normanton is referring to is 250 million tons of coal equivalent estimated, not bituminous coal.

Mr. Taylor: I am grateful to my hon. Friend for helping me out. When we have had such major technical developments in nuclear power and also in oil-fired stations, it is unfair to say that estimates should be entirely accurate. Even if we said that this figure of 250 million tons had proved to be wrong, surely it is an even greater error to move from 200 million tons three years ago to 180 tons in February, 1966, and then to a White Paper talking about 155 million tons, as though this was some kind of major advance.
I would suggest that this record does not necessarily prove that we have idiots in the Coal Board or in the Ministry of Power. It shows two things: first, that estimates are very difficult indeed to make, and, secondly, that all our estimates in the past have proved to be wrong and perhaps disastrously so. In these circumstances, is it not utter madness for the Government to suggest that we should now lay down our policies up to 1971, or at least give the Board borrowing powers until then? Surely what is required are frequent, if not constant reviews, and I suggest that the Government would be wiser to give the additional borrowing powers—

Mr. Ogden: Would not the hon. Gentleman agree with his hon. Friend the Member for Louth (Sir C. Osborne) and other of his colleagues who have congratulated the Chairman of the Board on his forecast, and have criticised the


Government for not making more money available for the social consequences of it?

Mr. Taylor: My hon. Friend takes a great interest in this industry, and when he makes estimates they usually prove to be correct, but I think the point that he was making was that it was as well to make realistic estimates in future, if it was possible to do so. My point is that I doubt whether such realistic estimates can be made, and for this reason it is important that we should regularly review the position.
I am a relatively new Member, but it occurs to me that one of the few opportunities which we get of discussing the affairs of the coal industry is when we are presented with Orders dealing with increased borrowing powers. Days are set aside to discuss the nationalised industries, but there are only a few such days, and not all of them are devoted to discussing, the coal industry. This proposal gives us an opportunity to review the situation in the coal industry from time to time. Would hon. Gentlemen opposite be satisfied to know that if the Government's estimate was right we might be deprived of an opportunity to discuss the position of the coal industry some years ahead?
There are other questions which need to be answered. For example, is it wise to give borrowing powers up to 1971. If the Government's forecast is right, and if many major questions of policy will have to be determined in the future? My hon. Friend the Member for Worcestershire, South touched upon one which is very important to Scotland, namely, the pricing policy of the coal industry. How can we in the House have any control over pricing policy, and the fundamental principles involved in it, if we do not have frequent opportunities to consider the borrowing powers of the industry?
I was surprised to hear my hon. Friend talking about the possibility of selling coal at 80s. or 88s. a ton. The steel works of Scotland have to pay 133s. 6d. per ton for coking coal. I suggest that the Minister should consider the possibility of having a uniform price for coal throughout the country, to see what effect this would have on coal consumption. The Government are doing what they

think is best to encourage regional development, but the plain fact is that the differential in fuel prices is a real ball and chain around the Scottish economy, and that of other areas, too.
In Yorkshire, coking coal can be bought for 100s. a ton, whereas, as I have said, in Scotland we pay 133s. 6d. for it. It is therefore clear that our heavy industry starts at a real disadvantage. Even in Wales such coal can be bought at about 115s. a ton. The effect of this increased cost is felt throughout the whole of Scottish industry. Our electricity board has to pay £1 a ton more for its coal than is paid by the English board, and this has a major effect on the price of electricity in Scotland. The Report of the Scottish Gas Board, published only a few weeks ago, said that the additional charge cost it £300,000. This is the kind of fundamental policy on which we in this Committee should have an opportunity of expressing an opinion.

Mr. McGuire: Does not the hon. Gentleman realise that the position would be worse if we were to depend on nuclear power? Hunterston A is costing an enormous amount. Would not the position be worse if the pits were to be closed as a result of not giving them the amount of money which we intend to give under the Bill?

Mr. Taylor: I agree with the hon. Gentleman about Hunterston A, which has proved to be slightly disastrous from the point of view of cost. We look for better things from Hunterston B when it comes along. But the point is that in Scotland we have this terrible problem of differential prices. We should like an opportunity to consider the matter from time to time by discussing the Orders on increased borrowing.
I do not want hon. Members to think that the intention of those who put forward the Amendment is to restrict necessary capital expenditure by the coal industry. That is certainly not our intention, and my hon. Friend the Member for Yeovil made it absolutely clear. All that we are concerned to have is an opportunity from time to time to review the progress and the capital spending of the coal industry. If we sanction this vast sum of £200 million, which could mean a three or four years' delay, we will


not have that opportunity. I know that the hon. Member for Ince (Mr. McGuire) takes a great interest in power matters. It should be in his interest to ensure that we have the opportunity to review progress from time to time. That is extremely necessary, and I hope that it will happen.
As the right hon. Member for Easing-ton (Mr. Shinwell) said, this is not only a problem of big business but a very human problem. We have the difficulties with the National Union of Mineworkers. From what I have seen and heard, this is a good union as unions go. But the problem is keeping in touch with the average person who is affected by closures. If a man's job is affected, clearly it is right that the Government should be able to give real assurances.
This brings us back to the question of borrowing powers. Would the Minister tell us, if we do not accept the Amendment, precisely when we shall have an opportunity to debate the progress of the coal industry to see whether all the wonderful estimates prove to be correct? It would be in the interests of the industry and of democracy if we did not give such large increases in borrowing but gave, as we suggest, £50 million less. If I had tabled the Amendment, the sum would have been much smaller.
We must regularly review progress in the coal industry and not consider it once every three or four years. For that reason, I hope that the Amendment will be accepted. I wish to make it clear that those who put it forward do not intend to restrict capital investment if it can be proved to be necessary, helpful and in the national interest. It would, however, be utter folly to give such complete carte blanche for so many years as is provided for in the Clause. I hope that the Minister will accept the Amendment.

Mr. Ogden: I agree with the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) on one point, namely, that it should be a regular feature of out Parliamentary year that one day a year we debate the National Coal Board and the coal industry. That is a point which we have made several times before. However, I could hardly agree with the hon. Gentleman's remark that this had been a useful and interesting debate until my

hon. Friend the Member for Derbyshire, North-East (Mr. Swain) came in. I am wondering whether Radio 4 is being piped through to the microphones of hon. Members opposite and that we cannot hear it.
There is some formality coming into our debates on the coal industry concerning the Members who will be called and the order in which they will be called. They are not pre-ordained, but at least there is a certain amount of predetermination. If we were betting Members on this side of the Committee as against those on the benches opposite, we would say that the hon. Member for Yeovil (Mr. Peyton) would get up, more in sorrow than in anger, and make a bitter complaint about the time at which the debate was being held, as he did tonight, and that he would send out a cry for the Leader of the House and that shortly afterwards my right hon. Friend would arrive, as he did tonight.

Mr. Peyton: I hope that the hon. Gentleman will understand that I am not responsible for this state of affairs. The reactions which I very modestly put forward were caused entirely by the conduct of the Leader of the House. I am sorry that the hon. Gentleman has not the perspicacity to see that.

8.45 p.m.

Mr. Ogden: I am saying that precisely this happens. Despite what the hon. Member for Cathcart said, the debate has followed its normal pattern. Whether it is 11 o'clock on a Friday morning or two o'clock on a Tuesday night, there is a cry for the Leader of the House, and eventually we get around to the subject of the debate. The hon. Member for Yeovil has made a number of personal attacks and is present to hear my criticism of him. Still ignoring his Amendment, he makes a bitter attack on the Chairman of the Coal Board and gives one-tenth of his time to his Amendment. He has failed tonight to convince me that it would be worthwhile to reduce the expenditure.
Then the debate progresses from Yeovil to Worcestershire, South. I congratulate the hon. Member for Worcestershire, South (Sir G. Nabarro) on his knowledge of the industry. Basically, he is friendly to the miners, and I agree with him on several points. I congratulate him on his


ability to catch the eye of the Chair—this is no criticism of the occupant—and particularly on his timing, because to make a major speech on this or any other Bill at this time is the best way to catch the next day's papers, but I am doubtful about his points—

Sir G. Nabarro: The hon. Member seems to have failed to observe that it was only because Mr. Speaker accepted the Adjournment of the House yesterday under Standing Order No. 9 that the debate began at 7 o'clock. Otherwise, it would have begun at 3.30, which would have allowed me to catch the evening papers as a result of my Parliamentary perspicacity and that of my hon. Friend the Member for Yeovil (Mr. Peyton) in filling, the Notice Paper with Amendments before North-East Derbyshire could get a look in.

Mr. Ogden: We agree on the timing, but I still wonder what the hon. Gentleman's speeches would be like at one or two o'clock in the morning.
On two points, I agree with the hon. Member—

The Temporary Chairman: Order. I hope that the hon. Gentleman will return to the Amendment as soon as possible.

Mr. Ogden: On the point of the Amendment, which is to remove the borrowing powers, the hon. Gentleman said something with which I agree—that there are greater possibilities for exporting to Europe than before, not only because of devaluation but because of the dropping of contracts. My conclusion from this, however, is the opposite of his. He regards it as a possible way of reducing the burden but I see it as an opportunity, and the money would be needed just as much.
I disagree, however, with the suggestion that it should be possible to reduce the sum involved by selling existing coal stocks for less than cost. The hon. Member for Cathcart referred to the price in Scotland, but he must accept that, if we are to sell to Scotland at a reduced price coal now lying on the ground in England the only effect would be to reduce the output of Scottish mines and thus replace one set of coal at less than cost with another set. If the hon. Member has thought out what he suggests, he will

realise that it would result in more rather than less unemployment in Scottish mines—

Mr. Edward M. Taylor: rose—

Mr. Ogden: Not at the moment—

Mr. David Webster: On a point of order. The hon. Member has made an aspersion on my hon. Friend. Is my hon. Friend not allowed to reply?

The Temporary Chairman: That is not a point of order.

Mr. Ogden: On many occasions, the hon. Member for Cathcart has asked me to give way and I intend to do so this time, but not at the beck and call of any hon. Member, no matter where he sits. The hon. Member for Worcestershire, South was asked several times to give way and did not always do so immediately. I will give way to the hon. Member for Cathcart, but in my time and not in the time of the hon. Member for Weston-super-Mare (Mr. Webster).

Mr. Edward M. Taylor: Would the hon. Gentleman not agree that I was suggesting that we should try to get uniform prices throughout the country and that the effect of this on consumption would help Scottish industry and should be welcome, instead of having differential prices, and that this would mean a slightly lower price in Scotland although a slightly higher one in Yorkshire?

Mr. Ogden: This might be considered, but the hon. Gentleman's point related to selling off coal more cheaply, which would only close down Scottish coal mines.
I understand that Amendments Nos. 45 and 46 are not called. They were posted to the House from the North-West last Thursday and it is not my fault that they are not on the Notice Paper. This is no criticism of the Table. They arrived on Saturday and were not in time to be considered for selection—

The Temporary Chairman: Order. They are on the Notice Paper but they are not selected.

Mr. Ogden: Yes, Sir Ronald, they did not arrive in time.
They sum up my opposition to the Amendment and my support for the only


thing which we can support, the figures in the Bill. However, the figures in those Amendments would have been preferable.

Mr. John H. Osborn: Some varied points have been made. I regret that I was not able to speak on Second Reading. We are talking of a sum comparable to half that spent on nationalising the steel industry, which will be spent between now and 1971 or in the next 16 months. In fact, it is a blank cheque, unless we or some other mechanism check that it will be borrowed and then spent wisely.
I had hoped to move the Amendment it my name to provide that the increased sum shall only be dispersed on the coal mining activities of the Board, but that Amendment has not been called. Had I been able to speak on Second Reading, as I wished, I would have raised points which I raised two years ago in the debates on the 1965 Coal Industry Act. Since then many disturbing things have happened. We should not take part in a debate of this type without bearing in mind the earlier debate that took up our time for about three hours.
Mr. Schweitzer, the O.E.C.D. and the I.M.F. are concerned about how we in this country spend our money, particularly in the public sector. Assurances will be required that this money is being spent to create wealth and not merely as a means of extending Socialisation. This is particularly relevant today compared with even two years ago, when I advocated the need for a cheap energy policy. I was greatly relieved to read on page 38 of the White Paper that this policy has been accepted by the Minister. It is as necessary now for our industries as it was then because unless we follow this policy our industries will not be able to compete in export markets.
Two years ago I queried whether the business objective of the N.C.B. was rightly solely to win, gain and mine coal as efficiently as possible and to concentrate on that task. When debating the 1965 Act on the coal industry—and I advise hon. Members to refer to the Committee proceedings on that Measure—I supported a move to delete the provision which is now Section 1(2,c) for acquiring an undertaking or part of an undertaking. We had considerable dis-

cussions on the topic and I would now like to know how much of the money that has already been loaned to the N.C.B. has been spent on activities which are not primarily concerned with winning, gaining and mining coal.
We have debated the subject of devaluation and the discussion that has taken place for the I.M.F. Ioan. On 30th November the Paris correspondent of the Financial Times reported:
The United Kingdom claim that the inflationary effects of higher State spending can he offset by increased taxation"—
This had not assured a number of delegates—
But another factor in their reserve was probably the widesperad belief on the Continent that the present Government is overtaxing the private sector to support its public programmes.
Bearing this in mind, it is wrong to have this debate and discuss the future of miners and mines without elevating it into the wider context of the economy. During the past three years the State has become heavily involved in a variety of trading activities, activities which, two or three years ago, would probably have been considered not to be any business of State organisations and nationalised industries. If we are not careful these activities may jeopardise the very bread and butter that feeds us.
From time to time the boards of nationalised industries must go cap in hand to the Treasury for increased borrowing powers. At present, these increased powers may enable these State Organisations to compete unfairly with people who are already in business. We must, therefore, carefully watch this aspect of the problem.
Hon. Members on both sides of the Committee have shared the view that the N.C.B., in a declining industry, should have power to diversify. Hon. Members might consider it wrong to dispute whether or not this money should be spent in that way. However, if diversification is to take place, it must occur under the same rules that the private sector must obey, otherwise State organisations will be competing unfairly.
A number of smaller matters must be raised in a debate of this kind. I looked, without success, through the N.C.B.'s Annual Report and Accounts in the hope of finding a reference to the decision to


install a new electric arc furnace at the Tredomen Engineering Works. But the Minister has answered Questions about this. Some hon. Members—except those who represent Welsh constituencies—will wonder what this subject has to do with the debate. I looked on pages 26 and 27 of the N.C.B.'s annual Report and Accounts, but could find no reference to these engineering works.
Thus, on Thursday, 22nd March, I asked a series of Questions of the Parliamentary Secretary. One was about annual capacity and output. The Parliamentary Secretary replied that he had asked the Chairman of the Board to write to me giving me whatever information he could. I received a letter from the Chairman of the N.C.B. and I have been able to release the information contained in it to the Press. It is the sort of information that those judging the affairs of the N.C.B. would not normally be able to acquire. An hon. Member may ask for it and the Minister may arrange for him to receive it. The yearly output of the Tredomen works is of the order of 1,200, 1,300, sometimes 1,400 tons. Hon. Members may ask, "What is that?" but the amount of steel castings sold ouside is increasing. What evidence have we of the capital going to this works? There is a fair profit on steel foundry activities in engineering, and this works gives a fair measure of what can be achieved in this field.
9.0 p.m.
On 4th April, I asked the Parliamentary Secretary if he would consider selling this particular activity. Off the cuff, in the House, he said "Certainly not", but this is something that should be looked at. If the Board is to come to the House for increased sums for its activities—

Mr. Ness Edwards: As this works is situated in my constituency, and was established long before the coal industry was nationalised, and as it is now being used to test cast supplies for the Coal Board and is a place where pilot schemes can be run to test the cost of production and the prices of various supplies, I should have thought that it was doing a first-class job of getting value for money for the Board.

Mr. Osborn: I thank the right hon. Gentleman for that interruption—he

knows my interest in the matter—and perhaps tonight he will make a speech advising us what capital is employed, what the turnover is and whether or not the whole engineering works is making a profit corresponding to the target set by the White Paper for these nationalised industries. If we can have the assurance that that is so, without having to probe and probe again, everyone will be satisfied, and if the works is providing employment in the right hon. Gentleman's area, it is to be welcomed. Perhaps he will make his contribution later, and let the House know more about this important activity.

Mr. Ness Edwards: The hon. Gentleman is asking me to make a speech. If he asks questions he must have an answer. The answer is that I do not regard this Chamber as the right place to get accountability of the detailed operations of any nationalised industry. I should have thought that the right place was in the Specialist Committees, which the officers concerned can be requested to attend, and be examined as to the details. Our general debates in the House seldom achieve anything.

Mr. Osborn: I am glad that the right hon. Gentleman has raised that point, because I wanted to deal with the value of our Specialist Committees. I do not want to decry the work of the Select Committee on Nationalised Industries, but if he reads page iii of the Select Committee's Second Report he will find that the Committee deals with 14 nationalised industries. It states:
There is, therefore, liable to be a long interval between the Sessions in which it is possible to examine the Report and Accounts of any one industry. Your Committee, therefore, decided this Session to invite the Chairmen of certain industries, whose Reports and Accounts have not recently been examined, to appear before them …
It points out that the coal industry was examined in 1958 and 1962.
We had a meeting at which Lord Robens of Woldingham, Chairman of the National Coal Board, appeared, attended by a Mr. R. G. C. Cowe. I was not present at the meeting, but I imagine that it took one morning—one morning has constituted close examination by the House of the activities of the Board. That Report was published on 16th February, 1966, before the last General Election.


Perhaps the Select Committee on Nationalised Industries is giving more attention to the Coal Board's activities, but this House has no mechanism for examining in detail the blank cheque that is offered time and time again.
The right hon. Gentleman must realise this, because those who are lending money to the country at present realise that although we have the mechanism for increasing the activities of the public sector we are completely incapable of controlling the activities of Chairmen and Boards, and it is the taxpayers who find that it is their standard of living which is at stake. So, while the right hon. Gentleman's interruption in a case like this is welcome, it is only a small episode in what we have to deal with.

Mr. Marsh: Clearly, the hon. Member feels strongly on this point and he has made a major factor of it. This is a criticism which has been made from time to time in the past. I think that it can be argued that there is quite a lot of information on the Board's diversified activities in the 1966–67 accounts. As a result of the strong views expressed, with which I have some sympathy, I have arranged that where the Board owns half or more of the capital, the accounts should be placed in the Library.

Mr. Osborn: I am obliged to the Minister. This is referred to, I believe, in one of the Reports, but we might have some difficulty about this particular factory, because I think that it comes under the heading of a maintenance shop and not of a wholly-owned or other subsidiary.
I have dealt with one small issue, but the importance of this matter rests on the fact that the Minister of Power and other Ministers are now responsible for over 10 per cent. of the steel foundry industry in competition with the private sector. Are not the activities over which the Minister has control or discipline using finance, some of which will be provided under the borrowing powers to provide unfair competition? We discussed it on the Steel Bill and I do not wish to pursue this particular issue.
I must apologise for taking rather more time than I had intended, but I must go on to the question of the brick industry. In Vol. 1 of the Report of Accounts there is a report on the manufacture of bricks.

It is a very illuminating report, occupying two pages. We learn that the brick activities of the Coal Board made a loss of £492,000 before charging interest against a profit in the previous year of £93,000. Reference is made to the Whittlesea Central Brick Company. We learn that a changing sales policy in the market is aimed at moving from output of non-Fletton bricks to a more balanced output of facing bricks as well as the Fletton and non-Fletton bricks. There, obviously, the Board is in competition with some of the big brick producers. There is reference to Throckley, in Northumberland, and Desford, in Leicestershire. The Coal Board is the second largest brick manufacturer in the country.
I remind the Committee of a Question asked by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) on 12th April. My hon. Friend
asked the Minister of Power why the Brickworks Division of the National Coal Board paid £132,000 interest on £2,200,000 capital in 1964–65, but only £92,000 interest on £2,400,000 capital in 1965–66.
The reply by the Parliamentary Secretary was:
I am informed by the Board that the interest charged to the Brickworks Division in 1965–66 reflected the reduction in the Board's total interest liability following capital reconstruction."—[OFFICIAL REPORT, 12th April, 1967; Vol. 744, c. 216.]
So some of the effects of the 1965 Act were to write down the capital of activities in competition with the private sector. This, I suggest, is a reason why we should examine how the money we vote on these occasions is spent. This is one of the aspects of the unfair competition with the private sector.
In the 1967 accounts the capital is £789 million whereas two years before it was £1,150 million which again shows the effects of previous legislation. The diversified activities of the Coal Board are such that we must be assured that if any of this money—perhaps £45 million mentioned by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) or perhaps a lower figure stated in the White Paper—is not spent on buying up other activities which have nothing to do with coal mining. We must be assured that money so spent is not devalued to provide the Coal Board and other nationalised industries with opportunities for setting up in unfair competition against the private sector.
It is time that the House had an assurance that the top management of the Coal Board had decided whether it was in business to gain coal. Is it not time that the Coal Board decided that its sole object is to rationalise its activities so that it did what it is supposed to do efficiently and effectively? The private sector is subjected to exactly this discipline. There is the Industrial Reorganisation Corporation. If the private sector does not of its own volition rationalise its activities, there is an organisation to ensure chat it does. Will the Minister discuss—

The Chairman: Order. I must remind the hon. Gentleman that this is not a Second Reading debate. We are dealing only with borrowing powers on this Amendment.

Mr. Osborn: I have been discussing the borrowing powers, Sir Eric, and I was—

The Chairman: I do not want the hon. Gentleman to argue with me. I am reminding him that on this Amendment we are discussing only the borrowing powers. It is not a Second Reading debate.

Mr. Webster: On a point of order, Sir Eric. If we are considering the borrowing of money, ought we not to discuss the ways in which the Coal Board uses it?

The Chairman: It is not a Second Reading debate. We are not discussing all the activities of the Coal Board. The debate is limited to borrowing powers and, therefore, an argument about relations with the private sector, which the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) was developing, is out of order.

Mr. Osborn: I shall bring my remarks on this matter to a close, Sir Eric. We must have an assurance that money borrowed under this Clause is spent in the right way, namely, in coal mining and the activities connected therewith and not on a lot of other ancillary activities. The Minister might well consider establishing a nationalised industries reorganisation corporation—perhaps he will discuss it in t he Cabinet—to ensure that this money is spent where it is needed, on the

coal mines, and that the Coal Board and other nationalised industries divest themselves of activities which are a drain on the public purse and a threat to the private sector.
I agree that there is a problem in establishing the correct rate at which our mines should be closed, but, before we vote the money here provided for, we should have an assurance that there is a better mechanism for vetting the Coal Board's activities. Accountants should report to us on how the money is being spent, and on how money has been spent in the past. Without sufficient assurances, it would be wrong to vote for the additional sum proposed by the Government. At the most, it should be a lower figure. The Coal Board and the other nationalised industries should have their activities properly vetted.
Admittedly, much of the money which it is proposed to borrow would go to help the miners. Those who face redundancy and insecurity have the compassion of all of us. But let us not forget that the money is provided by the taxpayer, and the nation is in severe economic straits. If the money is provided by taxpayers, it must come from wage and salary earners in other industries.
I doubt that the Minister has any proper mechanism available to him to show whether sums spent in the pact have been spent wisely or whether this money will be spent wisely. I doubt that the chairman of the Coal Board has such a mechanism, either. For these reasons, I support the Amendment.

Mr. Eadie: The hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) suggests that we should probe the finances of the National Coal Board, even in the past, so that we may have some idea whether to approve the borrowing powers now proposed. It has been a wide-ranging debate and, among other topics, I hope to say a word about that. I was rather surprised to hear the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) bring in the subject of coal distribution during a discussion on the whole question of costs.
9.15 p.m.
It is rather ironic to realise, when the whole efficacy of nationalisation is challenged, that in the main private enterprise distributes coal. Yet it costs more


to distribute it than to produce it, and therefore I do not know the logic in the argument about nationalisation when we are discussing the provision of money. That argument does not fill me with enthusiasm for going over to private enterprise or some other method as a way to begin to save money.
It is important that the Committee should probe, and like my right hon. Friend the Member for Easington (Mr. Shinwell) I have a number of questions to ask my right hon. Friend the Minister. I do not intend to be as dogmatic as some hon. Members opposite and some of my hon. Friends. It is important that we give due consideration to the spending of the money, particularly in view of devaluation; I believe that that is relevant to our being about to vote money to the National Coal Board.
When we think about bankers and money, it is interesting to recall what I think Mark Twain said, that a banker is a man who lends you an umbrella when the weather is fair, and takes it away from you when it rains. That may well be the predicament we are in.
I should like to put some suggestions to my right hon. Friend which may help the Committee in deciding whether to approve the borrowing powers. On 20th November we discovered that quite a lot of money was paid out by the Board as compensation to former owners of coal mines. The hon. Member for Sheffield, Hallam said that we must probe into the past to find out whether the money had been spent wisely, and it may interest the hon. Member for Glasgow, Cathcart to know that the amount paid in compensation for vested assets in Scotland was £35,951,068. That is an awful lot of money, and we are entitled to ask if it is right and proper that it should have been given to the private owners. It was suggested by the hon. Member for Worcestershire, South (Sir G. Nabarro) that we must carefully examine the Board's finances, be careful about how we spend money and make sure who has spent it.
I should like to know how the Coal Board spent money in payment to private owners. Did they deserve it? We understand that many of the collieries were handed over for a sum based on "unforeseen profits". But we also know that

some of those collieries never made a penny of profit. Some of them were closed, but I understand that the owners were paid "unforeseen profits" all the same. I am not a financial expert, but I know that the miners question whether that money should have been paid. Is there any more to pay? Do the people who get it, deserve it? When they get it, where do they invest it? Do they invest in industries ancillary to mining or in industries antagonistic to mining? These are important questions.
It would be parochial of me merely to concentrate on compensation paid in Scotland. We have the information here. In South Wales, the position is worse; there, over £36 million has been paid in compensation. I wonder whether my right hon. Friend will address himself to this vital problem. It might be possible for us to save some money here. Perhaps it would not be necessary to vote the sum under this Bill if we could save some money in compensation—even reclaim some of it. If we did, I am sure that the hon. Member for Worcestershire, South would be in accord with me because he made searching observations in relation to financing.
Compensation in Kent has totalled nearly £2 million; in Somerset over £984,000; in the Forest of Dean over £942,000. Thus we have a valid case to examine. We are entitled to ask whether there is any more to pay and whether some of it could come back. In Yorkshire, there is a staggering total of nearly £67 million; in South Staffordshire and East Worcestershire over £1·4 million; in North Staffordshire, £8½ million; in Cannock Chase, £7½ million; in Leicestershire about £4¾ million. These figures are catastrophic. I hope that my right hon. Friend the Minister of Power will listen because this is important. We are dealing with money which we could perhaps save. In Nottinghamshire it is over £29¼ million.

Mr. Shinwell: Is my hon. Friend aware that some hon. Members opposite got a great deal of this money?

Mr. Eadie: I am not a financial wizard—I have not been in the House long enough to know who has got this money. But I worked in the pit 30 years before coming here and I speak with great authority in saying that the miners resent all


this payment in compensation and they are entitled to, particularly when we get arguments against nationalisation. Indeed, we get arguments about the productivity value of miners in relation to their work. They are entitled to resent this.
I have more figures. In South Derbyshire, the total is over £4 million; in North Derbyshire, over £22 million and in Yorkshire, as I have said it is nearly £67 million. Something should be done and I hope that my right hon. Friend will try and bring some of this money back. In North Wales it is nearly £2¾ million; in Lancashire and Cheshire, nearly £40½ million; in Cumberland it is over £1,600 million, in Durham, it is £41½ million and in Northumberland over £17¼ million. If we are talking in terms of finance, those figures are relevant. I do not suggest that every hon. Member will share my enthusiasm for the proposition that we should get some of this money back.
My right hon. Friend the Member for Easington made a very good speech, although I know that it probably did not please m any hon. Members opposite.

Sir G. Nabarro: It pleased me.

Mr. Eadie: My right hon. Friend made some strong observations I should like to be associated with. One of the arguments always advanced by my right hon. Friend the Minister of Power is that we must consider this Bill in conjunction with the White Paper. The argument for the White Paper is that we must know the size of the problem in order to be able to do something about it. We are told that we must know the social problems attendant on the contraction of the mining industry so that we can do something about them. That is a fair proposition and I would not quarrel with it.
But it is difficult to know the problem in my constituency or for my right hon. Friend the Member for Easington to know it in his constituency when we do not know how many pits are to close. I was urged to support the White Paper. I put down Questions asking what the problem would be in my constituency, and my right hon. Friend could not tell me. How can we plan for problems attendant on the contraction of the in-

dustry if my right hon. Friend cannot tell me what they are? It is time that this information was forthcoming. It is no good my right hon. Friend saying that we can expect a contraction in the mining industry of X number of people. Only when we know the areas and the locations shall we be able to plan for the future. I appeal to my right hon. Friend to provide this important information.
9.30 p.m.
When we discuss the costs of the rundown, I hope that hon. Members opposite will remember the policy which they pursued from 1966 onwards. I have charged my right hon. Friend with culpability in connection with gas production. It is clear that right hon. Gentlemen opposite have an equal culpability in connection with the Magnox programme, the first nuclear power programme. Hon. Gentlemen opposite have said that we must consider our resources carefully, but we might not have had this problem if they had given proper attention to the operation of the Magnox programme where the misapplication of money was nearly a misappropriation of public funds. While it is true that that programme will result in the generation of electricity, the coal industry would not now be facing its present financial problems if hon. Members opposite had given more thought to it, for production in the mining industry would have been much greater. I hope that my right hon. Friend can provide satisfactory answers to all these questions.

Mr. Lubbock: The hon. Member for Midlothian (Mr. Eadie) will not expect me to agree with his remarks about the Magnox programme which was extremely valuable to the country because of certain consequences which flowed from it, in particular, the provision of large quantities of plutonium which will be available when the fast reactors come into commission in the mid-1970s and which we would otherwise not possess.
Nuclear power is far less susceptible to the effects of inflation than is conventional electricity generation where the running costs are much more important than capital costs. For example, according to a paper by Sir Ronald Edwards, the last increase in the price of coal on 1st April, 1966, added more than £30 million to the costs of the electricity supply industry.
I should be extremely surprised, if over the lifetime of the stations now being constructed, that was the last occasion on which coal prices had to be increased, whereas over the next 20 years one certainly hopes that the cost of uranium in nuclear power stations will remain much as it is and, even if there are price increases, they will have much less effect on the overall costs of generation, because they do not represent such a large proportion of costs.
The hon. Gentleman mentioned the compensation paid on nationalisation, but he will find that there is no mention of those figures in the accounts of the Coal Board, because they were paid out 20 years ago and are no longer relevant. It may have been because undoubtedly large amounts were paid in compensation that we had to reconstruct the Board's finances two years ago and write off about £400 million from the accumulated deficit, but that cannot be used as an argument for retaining the borrowing limits provided in the Bill and for rejecting the Amendments. The hon. Gentleman is too late to say that the finances of the Board could have been helped by clawing back something from those who received compensation.
The argument that the Coal Board's affairs should be scrutinised by the House well this side of March, 1971, is valid. Whatever one thinks about the future of mining, whether it should be larger or smaller, I would have thought that that proposition would command general agreement, whether or not one takes the view of the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) that we should subject the Board's ancillary activities to much more scrutiny. I do not think that that is particularly important when the accounts show only £3½ million invested in those ancillary undertakings at the end of last year. I hope that some of the ancillary activities will be increased, particularly investment in North Sea gas which I expect to be an extremely profitable investment for the Board, one which will help to reduce the amount which the Board would otherwise need to borrow.
This was the opinion of the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd), a former Minister of Power, who, in the debate in 1965, com-

mended the Board for its enterprise in branching out into exploring for North Sea gas. But, nevertheless, I should like to be assured that we shall have an opportunity of looking at the progress which the Coal Board has made, in conjunction with its partners, in the exploration of the North Sea gas some time in the next couple of years. This is the reason why I am supporting the Amendment. It is not because I want to limit or constrain the Coal Board within impossible limits so that it could not meet its commitments over the next few years, but because I think that we are entitled to have a look at the progress which is being made towards the objective set out in the White Paper.
The hon. Member for Hallam made some comments on the Select Committee on Nationalised Industries. He said that in the last couple of years only once has the Chairman of the Coal Board given evidence before that Committee, that this was for a single morning, and that during that time that Committee could not possibly probe all the details that the hon. Gentleman would have liked it to go into, such as the affairs of the Whittlesea Brick Company, and so on.
I have a certain amount of sympathy with him on this point, although I do not agree with the opinion once exspressed by the hon. Member for Worcestershire, South (Sir G. Nabarro) that the Select Committee on Nationalised Industries was a febrile and vacuous body. With the enormous number of nationalised undertakings that that Committee has to investigate, it is asking too much for it to do the job of the House and thoroughly probe the affairs of the Coal Board and make reports at intervals of sufficient frequency to give us a picture of what is happening.
I would draw the Minister's attention to one of the recommendations of the Select Committee on Science and Technology: that the House should have a special Select Committee, perhaps staffed by experts, to look at the energy industries of this country on a continuous basis. I think that if we had set up a Select Committee of that nature it would not have been necessary to have the argument which has occupied so much of the time of the Committee this evening. It is essential, to my mind, that


the energy industries, which are so important to our economy—the coal industry, the electricity supply industry and the gas undertakings—should be subjected to continuous scrutiny.
This can only be done by the establishment of a specialist committee for the job and not at the very infrequent intervals when the Committee or the House of Commons as a whole manages to get around to it. Meanwhile, as we have not got such a Select Committee in existence. I think that the only answer is for us to grant an increase in the borrowing powers of the Coal Board of such a dimension that will ensure that the Minister has to come hack to the House with another Bill well before 1971.
Looking at the developments which have taken place, even the forecasts which have been presented by the Minister in his present White Paper may be falsified. We have heard a lot of discussion about how wrong previous estimates were. The Ridley Committee, which was set up under the Tory Government, predicted 240 million tons output in 1962. However, this was not the only forecast that was hopelessly wrong when the time came to examine it in the light of actual experience. It may well be that we have not yet seen the ultimate effect of North Sea gas on the National Coal Board. We cannot make a judgment upon this unless we know what price the Gas Council is to pay for this gas and, therefore, how much it will eat into the traditional markets of the coal industry.
We can look at the figures in the White Paper of the amount of coal equivalent which may be consumed in the form of gas by 1975, but we cannot evaluate the Minister's forecasts unless we know how the price of this gas will compare with coal in the intervening period. We know that nuclear energy is coming down in price as each successive station is built. Even with Dungeness B it is already 10 per cent. cheaper than the best coal-fired station in the country.

Mr. Albert Roberts: Not true.

Mr. Lubbock: The hon. Gentleman says "Not true", but I suggest that he looks at one of the appendices to the Report of the Select Committee on Science and Technology where not only

are figures set out which were arrived at by the Minister of Power's Working Party, but also the subsequent report of a group, including representatives of the Coal Board, which went through those figures with a fine tooth comb. The representatives of the Coal Board on that Committee agreed with the Working Party's figures, although Lord Robens subsequently tried to repudiate them.

Mr. McGuire: s: Does not the hon. Gentleman know that the C.E.G.B.'s estimate of the cost of nuclear energy at Dungeness B, which is to come into existence three years from now, is only one-hundredth of a penny better than at Cottam, and that this does not take into account the effect of devaluation which will increase the price of imported uranium. There is no advantage at all.

Mr. Lubbock: I do not agree with the hon. Gentleman that devaluation will increase the price of uranium, because we have substantial stocks of it. It will not affect the enrichment costs, because this will be undertaken by the Atomic Energy Authority at its Capenhurst works. The hon. Gentleman may try to adjust the figures, as Lord Robens does, but he cannot get out of this. There is a 10 per cent. differential between the first of the advanced gas-cooled reactors and the best coal-fired stations coming into operation at the same date.
If he looks further ahead, to Hinkley Point B Station, and Hunterston B, to which the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) referred, he will see that costs are coming down to about 0·45d. per kilowatt hour. According to the Chairman of the South of Scotland Electricity Board, this represents a difference of not 10 per cent., but 30 per cent., compared with the cost of coal-fired stations which will be coming into operation at the same time, because, as the hon. Member for Cathcart said, the cost of coal in Scotland is 34s. 10d. more per ton than that from the cheapest coalfields in England.

Mr. Webster: I think the hon. Gentleman will agree that we write off coal-powered stations after 30 years, whereas the period of amortisation for nuclear stations is 20 years. This means a 10 per cent. difference in the cost per kilowatt hour.

Mr. Lubbock: The hon. Gentleman is right, but I have never understood why the C.E.G.B. adopts rules which are unfavourable to nuclear power. This is not the only one. There are other ways in which it is possible to compare the cost of nuclear power and conventional power. If the same ground rules were applied to nuclear power as to conventional power, the differential in favour of nuclear power would be very much greater than it is already.
I suggest to hon. Gentlemen opposite, and to hon. Members like the hon. Member for Worcestershire, South (Sir G. Nabarro), that they should not try to sustain the consumption of coal at some predetermined level by artificial means. The hon. Member for Cathcart suggested that there should be the same price for coal all over the United Kingdom. Somebody will have to pay for that, and we are already facing a large bill in this Measure before us, due to the increase in the borrowing powers, the amount which we are subsequently going to vote under other Clauses, the subsidy to the electricity undertakings and gas boards for the consumption of coal as opposed to some alternative fuel, and so on.
If these suggestions are accepted, somebody will have to pay for them, and no doubt it will be the taxpayer. People will then say, "You are increasing public expense beyond all reason" and the hon. Member for Cathcart, the hon. Member for Worcestershire, South, and others, will criticise the Government for that. I daresay that after this afternoon we might find that the I.M.F. will have something to say about it as well. They say that the growth of public expenditure must be controlled within certain limits, and this is part of the price that the Government are having to pay for a very large loan.
If the suggestion that fresh subsidies be given to the coal industry were accepted, not only would these borrowing limits have to be increased still further, but some very difficult explanations would have to be given to the I.M.F.

9.45 p.m.

Mr. J. T. Price: Even in terms of Adam Smith economics, this is a complete heresy. The argument which the hon. Gentleman is putting forward—and I am astonished that, as a Liberal, he can put it forward—surely

amounts to this. He is completely forgetting that this country has 200 years known supplies of coal, the greatest single economic asset which it posseses. The hon. Gentleman's argument completely ignores that. One cannot just wipe it off and say that it does not affect the price of other things. I have heard much hostile criticism about the phoneyness or suspect nature of the statistics put forward by the Coal Board. The statistics being put forward by the North Sea gas and atomic energy people are extremely suspect.

The Deputy Chairman (Mr. Sydney Irving): Order. It appears to me that the hon. Gentleman is making a speech, not an intervention.

Mr. Lubbock: I accept that, according to Lord Robens's figures, we have 200 years' supply of coal under our feet at the present rate of consumption. But that does not mean that it is worth using it if it costs so much more than alternative sources of energy. The hon. Gentleman might just as well say, "Let us go back to burning wood in the locomotives because there are plenty of trees in the country. We are not making use of this very important national asset but are merely letting it grow and accumulate uselessly in our forests."
That is the logic of his argument—that simply because we have a natural asset it is wasteful not to use it. His economics are fallacious. If we can produce natural gas from the North Sea or electricity from nuclear energy at very much cheaper rates than we can produce the equivalent from coal, it is worth making use of these alternative sources of energy.
As long as the hon. Gentleman and his hon. Friends try to sustain the consumption of coal at a predetermined level and try to sustain employment at 380,000, or whatever the figure is, they will not tackle the real job with this Minister, and that is how to provide alternative employment for the miners being displaced from their existing jobs and how to pump new industries into the areas affected, not only into the development areas but into Yorkshire and parts of England which are not at present in development areas.
These are the important problems which the hon. Gentleman and mining Members and the National Union of


Mineworkers are neglecting. If they would cease preaching the maintenance by artificial means of the coal industry at a given level and started to attack the Minister for his failure to provide jobs in the mining areas and to give adequate assistance to industry going to those areas, they would do their jobs much better than they are doing them.

Mr. Marsh: We have had a very long debate on the first Clause of a very important Bill. It is right that it should have been a big debate because, as the hon. Member for Worcestershire, South (Sir G. Nabarro), with his characteristic Victorian elegance, said, this is the guts of the entire Bill. It is right that we should have had a more wide-ranging debate than will be the case on any of the other Clauses.
The hon. Member for Orpington (Mr. Lubbock) made a number of points and took full advantage of the width of the Clause. He ranged around the needs of an energy board, which is not covered in the Bill, and which I would be prepared to debate and disagree violently upon at any time. He also mentioned nuclear power and it is significant that whatever decisions were taken about power stations, whether nuclear or coal-fired, they could not come on stream or have any effect until long after the Bill expires, so are not relevant.
The hon. Member for Yeovil (Mr. Peyton), who normally "kicks off" on these occasions, asked how reliable are the forecasts on which this proposition is based. It is beyond dispute that forecasts of coal production and consumption have always been wrong in the past and in the same direction. They have always been over-optimistic. This is a danger not merely in terms of managing, but, far more than that, because much of the human suffering in the industry has resulted from the failure to recognise the size of the social problem in time. We have always considered a level of output and demand which was comforting at the time but never achieved—

Mr. Swain: My right hon. Friend has repeated this proposition—it is on a tape, I think—about the size of the problem. How can he, in the Bill, deal with the size of the problem when he consistently answers my hon. Friends that he does

not know and cannot forecast the size of the problem in their industries?

Mr. Marsh: I intend to come to this point later, because it also follows on some of the questions of my right hon. Friend the Member for Easington (Mr. Shinwell), to whom I apologise for the fact that he did not get answers before.
This is important, because no one knows what will happen in the industry. There is no claim that the White Paper produces the final solution. It is the result of 18 months' work to find the best possible global estimate. In 1970, I think, we are likely to be fairly close to the truth, about 1975 I am less certain, and it is nonsense to estimate about 1980, because no one knows what equipment the industry will have or what other factors will apply. So the hon. Member for Yeovil—this is probably the last time that we will agree: I hope so—is right to cast these doubts. I have never pretended that the figures is the White Paper are more than the best estimate that we can make with the available sophisticated techniques.
Therefore, we are recognising what is happening in the industry and saying that it is too rapid. That is why we come to the Committee tonight for further legislation of this type, because to prevent the rate of rundown and to minimise some of the social hardships which will result, society has to pay the bill. This bill is not just on investment for equipment, but is part of a large exercise intended to slow down what would otherwise be the rate of contraction in the industry and thereby minimise some of the social consequences.
There has been much discussion about diversified activities. It is right that the Committee should concern itself with the spending of public money, particularly sums as large as this, and I think that the House of Commons will be asked again to look at the industry. No one would suggest that the Board's diversified activities are in themselves a central issue. It worries some and is a source of query, which is why I think it right to say that we have agreed that copies of the accounts of companies in which the Board owns half or more of the equity will in future be placed in the Library for hon. Members to consult.
It would be a great pity—here I take issue with the hon. Member for Yeovil—to use the Bill as a vehicle for doctrinal arguments about private enterprise and diversification, paying off old scores against the Lord Robenses or any other individuals in the industry—

Mr. Peyton: I assure the right hon. Gentleman that I am not paying off any old scores nor indulging in doctrinal arguments. I am simply concerned that the nation's resources, which are at the moment not overflowing, should be decently safeguarded by the House of Commons, and nothing else.

Mr. Marsh: I realise, on reflection, that my reference to old scores could have meen misconstrued and I apologise. I meant that there is no point in turning this into an argument about personalities. Whoever headed the Coal Board would face one of the biggest managerial and social problems of any industrial management.
Reference is sometimes made to our colleagues across the Channel, who are doing a grand job, but who, in every European country—perhaps with the exception of the Poles—face problems in coal mining. The Coal Board is handling its problems more efficiently and humanely than any other country with problems of this size. When there are arguments about nationalisation, no hon. Member on either side has the faintest doubt what would have happened to this industry in these circumstances under private enterprise. It would have ceased to be profitable under private enterprise in large blocks of the country years ago if it ceased to be profitable under the Coal Board.
The difference with private enterprise, now that the coal industry is under central control, is that it is possible to approach this with a central direction and inject into the problem more than a straight and rather squalid argument about whether something does or does not pay. This argument must be taken into the equasion and cannot be ignored. It enables us, with the system of public ownership which we have in this industry, to approach it with a degree of efficiency and humanity which I again say is better than the system existing in most

other countries with similar problems. Ask the coal miners of the Ruhr whether they find their privately owned coal industry a particularly attractive proposition.

Mr. William Baxter: I am interested to hear my right hon. Friend's remarks about the humane treatment, more or less, being given to coal miners who are knocked out of work, compared with the treatment that they would have received under private enterprise. This may be true in some cases, but I urge my right hon. Friend to consider the position in West Stirlingshire, where 14 pits have been closed during the last six or seven years. What humane treatment has been meted out to the miners who have lost their jobs in my constituency.

Mr. Marsh: I am not for the moment pretending that the present position does not involve, and has not involved for years, enormous hardships and enormous social problems for large numbers of our people.

Mr. Baxter: The Bill—this is of vital importance to the people I represent—does not seem to provide very much for the miners who are knocked out of work in my constituency. Any advantage that will accrue will occur from the time of the passage of the Bill. What about the miners who have been knocked out of work in the last two or three years? What compensation will they get?

Mr. Marsh: I would be trespassing upon the rules of order if I were to try to deal with this and similar matters. My hon. Friend will have a chance to raise this issue on a subsequent Clause. The Bill sets out to provide the first basis, following the White Paper, to tackle this problem. A lot more needs to be done and I will be dealing with that when we come to later clauses, which may not receive the unanimous support of the Committee. At this stage I am arguing the need to get this problem dealt with on a co-ordinated and regional basis.
I return to the question of the sums involved—

It being Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.

Committee report Progress.

BUSINESS OF THE HOUSE

Ordered.
That the proceedings of the Coal Industry Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Gordon Walker.]

COAL INDUSTRY BILL

Again considered in Committee.

Question again proposed.

Mr. Marsh: I return refreshed, after that short intermission or technical hitch, to the subject of the money with which the Clause is concerned. A number of hon. Members have asked for explanations. Seldom, if ever, has such a degree of detail been given as is presented in the White Paper. In paragraphs 128 to 131 appear a great many explanations, and the hon. Member for Worcestershire, South (Sir G. Nabarro)—I mention him this early in my speech to satisfy him—quoted freely from these paragraphs.
The position is that borrowings under the 1965 Act, excluding temporary borrowings, will be about £700 million by March, 1968. If one therefore allows for temporary borrowings and stocks, borrowings may exceed £800 million by the end of next year. I must come to Parliament long before there is any danger of the statutory limit being exceeded, and this means that under the Bill I would expect to ask Parliament to approve a draft order, probably before the end of 1969.
It is not unreasonable that an industry faced with the difficulties which the coal industry faces should have a clear idea of its future, certainly up to the middle or end of 1969. It is equally right that, when dealing with sums of this size, Ministers should have to return to Parliament. This system means that I or some other Minister of Power—which is an attractive thought from time to time—will return here before the end of 1969 for further discussion on this to get an adidtional order. Hon. Members on both sides have considered ways of avoiding this procedure. However, the sums involved are so enormous that there must be some method of adequately dealing with the matter.
The hon. Member for Worcestershire, South pointed out strongly that we should sell off coal stocks. This is an attractive proposition which, I assure the hon. Gentleman, had crossed the mind of the N.C.B. from time to time. With 30 million tons of coal on the ground, if the N.C.B. could get someone to buy it, that would be considered a good thing. The problem is that if one were to sell it internally, one would be displacing coal with coal. We are making arrangements to use additional coal in power stations, but we will be coming to that in a subsequent part of the Bill.
Exports have been a difficult problem for a long time. A large element of American coal going to the Continent consists of coking coals—they probably constitute the major proportion—but a large proportion of our stocks consists of bituminous coal, and that does not mean that our stocks are of coals which other people are buying from the United States. I should not have thought that we could break into the American market and, in any case, I am sure that hon. Members on both sides would agree that it would be very marginal in the short term—

Sir Harmar Nicholls: rose—

Mr. Marsh: No, I really must get on.

Sir Harmar Nicholls: I should just like—

Mr. Marsh: The hon. Gentleman is a brief visitor this evening—but never mind.

Sir Harmar Nicholls: That does not alter the fact that I am listening to the Minister's speech. Is he saying that this £30 million worth of stock is unsaleable, and therefore should not be included as stock or what does he mean?

Mr. Marsh: I did not say that it was £30 million worth of stock, but 30 million tons of stock. I say that it is unsaleable in that the Board has not been able to sell it. Most people would agree that the Board's marketing is extremely efficient—

Sir G. Nabarro: I have put this point to the right hon. Gentleman on many occasions. He has given a variety of


good reasons why the Coal Board cannot sell that 30 million tons of coal. I put to him earlier, and on Second Reading, that a large part of this coal has been there for years. Is it not the fact, therefore, that it is unsaleable? If that is the case, will he say so? Alternatively, why not switch over the dual-fired power stations that are consuming millions of tons of imported oil, and use this allegedly unsaleable coal, all of which is capable of being burnt in power stations, instead of imported oil?

Mr. Marsh: We will come later to the question of coal-burning power stations. In terms of the deterioration of stocks, our coal stocks 10 years ago amounted to 8·6 million tons. It, therefore, follows that the vast bulk is less than 10 years old, and its deterioration has not been considerable. If someone would buy it, nobody would be happier than I to see the Coal Board sell it.
My hon. Friend the Member for Midlothian (Mr. Eadie) advanced a proposition which I find attractive though, with regret, I have to say that I do not think that it offers much hope. He said that the compensation paid to the coal owners was too high. That matter, of course, was not one for me—I was not the right hon. Gentleman who fixed the compensation stock for nationalised industries at that time—and it would be profitless for us to discuss whether or not the level of compensation has been sold many times, and those who now own it probably have no relationship to the original coal proposition but it is not one that helps us out of our difficulties.
My hon. Friend also referred to a matter on which he feels very strongly. I respect him for it because has has always pushed the interests of his constituents. He said that there needs to be a plan on a regional basis for dealing with the social consequences whatever may be the scale of the rundown. It was to this point that my right hon. Friend the Member for Easington (Mr. Shinwell) returned when he asked specifically about rundown.
It is quite impossible to project as far ahead exactly which pits will close when, and rather easier to say what the total

coal production will be. None the less, two pits are known to be due to be closed during 1968—as a result of exhaustion, for which there could be no argument. One would certainly expect most of the 16 deferred pits to be closed in the course of 1968, and there are known to be some 31 pits in jeopardy, of which a number would clearly go during that period. Of course, in a year, and certainly in the course of more than a year, this pattern changes very much; some pits improve their performance. But we can see pretty clearly what the size will be in the end.
My right hon. Friend made a point about productivity. He was passing on a question which miners asked him and which I am asked at miners' meetings from time to time. The question was: what is the effect of productivity on manpower leaving aside any decision to change the levels of coal production? This is one of the dilemmas we face, and it is important to face it. If productivity rises, it means by definition fewer men. If productivity does not rise, it means higher prices, inability to sell the coal, and fewer men. There is no way out of this impasse. That is a phrase I wanted to get in at some stage this evening, but seriously this is an important point.
If, as is sometimes said—I think it completely impracticable and quite impossible—coal production were frozen at the existing level until 1970–71, we would lose 100,000 coal miners as a result of productivity alone. If we could not get that productivity we would lose even more men and be able to produce less coal.
It is right that hon. Members should say, "Have the Government done enough in alternative employment?" It is right that they should put probing questions to Ministers. What would be disastrous would be to try to convince coal miners that there was any way out of this contraction in mining manpower apart from certain limits. It would be a wicked thing to do because (a) they would be disappointed and, (b), social measures would not be taken.

Mr. Shinwell: I am following with great attention what my right hon. Friend is saying and I recognise that in


a sense we are on the horns of a dilemma. Does he not realise that if we say to men in the mining industry, "Your pit is not paying its way, therefore you have to work harder, use the machinery at your disposal with greater effort and greater effectiveness. If you do not do that the pit will close," so that the men go ahead, put their hearts into the work and produce more coal, greater productivity, only to discover that many of them become redundant—there is the dilemma—obviously, the third question I put to my right hon. Friend applies? Before men become redundant, or are made redundant, the Government in some way must be able to offer them alternative employment.

Mr. Marsh: The Government are, of course, engaged in a series of new measures in relation to alternative employment in these industries. The whole point of the Bill and of the White Paper is based on a belief that increased coal-mining productivity is the defence which the miner has against redundancy on an unacceptable scale. Therefore, the purpose of the Bill is to give the industry a breathing space to help it to get the level of productivity to enable it to compete with other industries.
My right hon. Friend made the point that he would not vote—Front Benchers on this side of the House know that this can frequently be no idle threat—unless he was satisfied that the money was being used for social purposes as well as other purposes. But some of this money arises out of the increased coal stocks and there is some criticism about the growth of coal stocks. One of the arguments we would get is that we should curtail production because that would involve coal stocks. But part of the price which the community has to face in giving the breathing space is a recognition that there are large stocks of coal on the ground and the policy which we are pursuing is bound to mean that these coal stocks will continue to increase for a time. The financing of additional coal stocks is part of the social measures.

10.15 p.m.

Mr. Swain: My right hon. Friend has referred to coal stocks. Is he aware that part of the money to be found under the Bill will go to finance 15 per cent. or so of the total stocks which are open-cast mined coal at the moment, and that 15

per cent. represents about 3 million tons of the overall stocks? Will he not wisely consider the abandonment of all opencast working in the future, as nearly its total production today is being put into stock? Will he abandon open-cast working in favour of deep-mined coal?

Mr. Marsh: I hesitate to be led astray by my hon. Friend into the rather complex issue which he has raised. There is this clash, as it were, between open-cast coal and deep-mined coal. Open-cast coal at present is, I think, about 4 per cent. of total production; it is absurdly cheap in comparison with normal coal and is, therefore, beneficial to the industry commercially. On the other hand, there is the question whether it is sensible to go on mining open-cast coal, given the surplus of deep-mined coal. This is a perfectly reasonable question to raise, and it is one I am in process of discussing with the Coal Board at present.
I want to finish dealing with the perfectly fair questions put by my right hon. Friend the Member for Easington. He spoke about investment in the industry. It is essential to get increased productivity, and one of the methods of doing it is investment in the most modern efficient machinery in the world, such as we have in some of our long-life pits. I was very interested recently to meet the Soviet Minister of Mines and, only last week, the Ukrainian Minister of Mines, both of whom were very impressed by the standard of British mining equipment in use in this country. Eighty per cent. of all the investment it is intended to make would be in the long-life pits, and the remaining 20 per cent. is a minimum level of investment, mainly on safety measures, in short-life pits. To that extent again, therefore, one would hope that this level of investment would all go towards ensuring that miners may have the breathing space to which I have referred.
My hon. Friend the Member for Derbyshire, North-East (Mr. Swain) said that he wished the figure in the Bill were even bigger. I have a lot of sympathy with that view. I do not think that the Committee is under any illusion that it has paid the final bill for this exercise by the present Bill. At other stages in the future, other Ministers of Power, as in the past, will return to the House with


Coal Industry Borrowing Powers Bills. But, because of the size of these figures, it is important that limits should be set which force Ministers back to the House of Commons in order that not only the finances but the policies upon which those finances are based can be debated.
The White Paper, the Bill and the measures stemming from it will be debated many times in the future. It is proper that they should be. I ask the Committee to resist the Amendment. Perhaps it is too much to hope that the hon. Member for Yeovil (Mr. Peyton) will now feel inclined to ask leave to withdraw it, on the ground that he has been convinced. However, if he is unwilling to do so, I ask my right hon. and hon. Friends to vote against the Amendment, in the belief that the borrowing powers are essential to the health of the industry and the humane treatment of the men engaged in it.

Mrs. Thatcher: Without wishing to restrict anyone who wishes to follow in the debate, I think that it might be convenient at this point if I were to comment on what the Minister has said. He has, rightly, covered a wide debate and answered many of the points raised, but I shall confine myself to the narrower issues before the Committee. I shall make my comments under five heads: forecasting, the financing of stocks, investment, closures, and financial disciplines.
I agree with the Minister when he says that no one knows what will happen. This, in a way, is the key to the Amendment now before us. If there is one sure thing about forecasting it is not only that it has been wrong but that it has been proved wrong at an unparalleled rate recently. All forecasts have been wrong, but the rate at which they have been wrong has been increasing. It is easy to demonstrate that merely by looking at the figures put up to the Prices and Incomes Board in 1965, on the basis of which the National Coal Board asked for a price increase. The figures put forward then were confounded in the Board's Annual Report for 1966–67. The demand forecast was already too high and the productivity forecast was already too low, even in that restricted time.
In the Second Reading debate we went over the past year's forecast, which has been even more wrong. I agree with many hon. Members that we now face problems the dimensions of which could not have been appreciated a number of years ago. In 1959 we had a target of 200 million tons a year and one of my colleagues, then Parliamentary Secretary to the Ministry of Power questioned whether we could sell that quantity of coal in a year if it were produced. The then Mr. Robens said:
This is the answer to the Parliamentary Secretary, who shrieked the other week, "It is all right talking about 200 million tons, but you have got to sell it when you have got it." Of course one has, but it can easily be sold. There is no need to get bothered about it. We could export 10 million tons of coal a year, too."—[OFFICIAL REPORT, 23rd July, 1959; Vol. 609, c. 1553]
Earlier in his speech he had said that contraction was the answer for the coal industry, and that if it contracted and had time to do so coal could be competitive with oil anywhere in the country.
We have followed up the remedies of contraction. The industry has had time to contract, but it has not become competitive with oil anywhere in the country, and we still have tremendous problems. It is not only the forecasting of demand that has been wrong. There has been forecasting of the rate at which the remedies would work and how, and this also has been wrong. For this reason, we think that if the Coal Board wants large, increasing sums of money it should come to the House more and more frequently. We should keep a much closer watch on the changing forecasts about coal, because they change far faster than was ever envisaged when we first had these Acts.
I want to add something about financing stocks. During the Second Reading debate I asked the right hon. Gentleman a number of questions about stocks—about their quality and age. He has not answered them, but we still have to face some rather confusing figures about stocks. The hon. Member for Dearne Valley (Mr. Edwin Wainwright) has said that under a Tory Government we had stocks of 50 million tons. I quickly looked back at the figures, which were for undistributed stocks held by the Board. The highest figure was in 1959, when stocks were 35·7 million tons. That does not take into account distributed


stocks. Had the then Minister pursued the current policy of adding to the stocks regardless, the problem with which the right on. Gentleman is faced today would be far greater than it is. We should have a larger and larger stockpile and larger and larger amounts of working capital tied up in stocks which were never likely to be sold.
What the Coal Board did then was to say, "We shall reduce the stocks by reducing production below the level of demand", and the stockpile naturally fell. But at the end of last year we had stocks of 20 million tons, valued in the Coal Board accounts at £80 million on the basis of their current value. That was writing them down from a higher value, because I understand that when they are put on the stockpile they are valued at market price and not cost price. Their market price has been higher but their written-down value was £80 million. That applied to 20 million tons.
We now have an extra 8 million tons. Assuming this to be put on the stockpile at £5 a ton, we have in stock tied up an extra £40 million, which means at the moment that we have tied up in stocks £120 million. Already the right hon. Gentleman is proposing to go on increasing stockpiling, although he knows that probably a number of these stocks will never he sold. An article in The Economist of 21st October said:
So on the Coal Board's own unpublished reckoning, up to 50 million tons will be piled up into huge coal tips by the early 1970s. A ton of coal costs as much to store over ten years as it does to dig—which is close on £5 a ton. So £500 million could eventually be locked up in vast deteriorating heaps, for which the Minister of Power has undertaken in theory to compensate the Coal Board.
If this is so, it is economic madness in any terms, bad for any business enterprise and bad for the morale of those in the coal industry. Morale will never be raised in the industry while the men know that the coal they mine is going to increasing stocks in increasing piles. As far as I can see, morale will be raised and the right people recruited at managerial levels only when the industry has finished its contraction and is once again competitive on its own unsubsidised merits. At that point it can expand.

Mr. Marsh: The logic of what the hon. Lady is saying would be to return to a policy now of reducing production

below the level of demand so that the demand could be switched into stocks. If that is what she is saying, the figure in 1970 would not be 155 million tons but something like 120 million tons. Does she think the industry could face that?

Mrs. Thatcher: The logic of what the right hon. Gentleman is saying is that he will go on increasing stockpiles regardless of demand. Is he seriously saying that? I would prefer to have production reduced below demand and spend the money on what we will have to spend it on eventually—not on increasing stock piles, which is putting money to a dead purpose, but on helping people to go to other industries and helping other industries to go there if need be. That is a more constructive use. If the right hon. Gentleman's predecessors had followed his policy, we should have a problem of unmanageable proportions now.
Now I turn to the financing of investment. I asked about this on Second Reading and it is germane to the Amendment. I asked what the increased amount for investment would be used for. In the White Paper, the right hon. Gentleman says that part of these extra borrowing powers would be used for increased investment. Increased investment was to have been generated from internal sources but now it cannot be since sales are down on the expected amounts. The White Paper says that increasing investment is required to the tune of £60 million for net capital investment in collieries and ancillary activities.
We are very anxious that any increased investment should go into productive pits, to help produce coal more and more competitively. The Minister, in his Second Reading speech, said that the money will be required
… to supplement internal resources, mainly depreciation, available for capital investment of all kinds."—[OFFICIAL, REPORT, 28th November, 1967; Vol. 755, c. 260]
Presumably that would include ancillary activities. The Parliamentary Secretary, in response to my question at the end of the debate, said:
A point raised by the hon. Member for Finchley was whether capital expenditure as intended under the Bill will be confined to colliery modernisation or will go to diversifying the activities of the N.C.B. The assurance I give is that this capital expenditure will be extended to the programme of modernisation


in the pits, which is of course the policy of the N.C.B."—[OFFICIAL REPORT, 28th November, 1967; Vol. 755, c. 390.]
10.30 p.m.
Who is right? The White Paper and the Parliamentary Secretary or the Minister? They cannot both be right. If they are to have increased borrowing powers, and the Minister and the Parliamentary Secretary do not agree, that is another good reason for reducing the borrowing powers, and to get them to come back to Parliament when they have agreed.
One point on pit closures. I criticise the Government with regard to the instructions which appear to have been given to the Coal Board on pit closures. I noticed that in the debate on the Coal Industry Bill in November, 1965, the then Minister said that
the Board intends, with the Government's full support, to speed up the process by effecting more than half these closures within about two years from now."—[OFFICIAL REPORT, 25th November, 1965; Vol. 721, c. 784.]
So he said the Board intended to speed up the closures. The Report of the National Coal Board for the year 1965–66 said on page 6:
The Board had originally planned to phase the colliery closures fairly evenly over the years 1966–70 but at the Government's suggestion the major part of the closure programme will be completed in the two years 1966 and 1967.
No enterprise, whether public enterprise or private enterprise, can operate on contradictory instructions, and it looks at the moment as if the Government asked the Board to speed up these closures, and are now telling the Board to slow down the closures. My sympathies go to the Board on this, because contradictory instructions appear to have been given to it. That is not the Board's fault, but the fault of the Minister and his predecessor, who is now running economic affairs in the North-East.
What we are anxious to do is what was recommended by the National Board

for Prices and Incomes when it considered the prospect of raising prices of coal which that Board agreed to. That Board said that what the industry needed was "tightening financial discipline ". On page 15 of its Report No. 12 it said:
Costs and prices can be held for the future only if this is changed.

The change required was concentrating on the profitable pits, but not to get the profitable pits to carry the unprofitable pits. It went on to say:
The Government can help to induce this change by tightening financial discipline.

This is what we on this side are seeking.

I feel fairly certain that my hon. Friends will not have been convinced by the right hon. Gentleman's reply. I am not convinced myself. I hope, therefore, that my hon. Friend will think it right to press his Amendment to a Division.

Mr. Brian O'Malley (Lord Commissioner of the Treasury): rose in his place, and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The Committee proceeded to a Division—

Mr. Webster: (seated and covered): On a point of order. I understand that you have put the Closure, Sir Eric. Although I have been in the Chamber for the last hour and a half, as I was here for the whole of Second Reading, and although I saw a Whip stand up and open and shut his mouth, I heard nothing. What happened was completely inaudible to me. Did you, in fact, put the Closure?

The Chairman: I do not understand what the hon. Gentleman's point of order is. I have accepted the Motion for the Closure.

The Committee divided: Ayes 177, Noes 114.

Division No. 8.]
AYES
[10.33 p.m.


Albu, Austen
Bence, Cyril
Braddock, Mrs. E. M.


Allaun, Frank (Salford, E.)
Benn, Rt. Hn. Anthony Wedgwood
Brooks, Edwin


Archer, Peter
Bidwell, Sydney
Brown, Bob(N'c tle -upon-Tyne, W)


Armstrong, Ernest
Bishop, E. S.
Buchan, Norman


Atkins, Ronald (Preston, N.)
Blackburn, F.
Buchanan, Richard (G'gow, Sp'burn)


Atkinson, Norman (Tottenham)
Blenkinsop, Arthur
Cant, R. B.


Barnett, Joel
Booth, Albert
Carter-Jones, Lewis


Beaney, Alan
Boston, Terence
Coleman, Donald




Concannon, J. D.
Houghton, Rt. Hn. Douglas
Oswald, Thomas


Conlan, Bernard
Howarth, Robert (Bolton, E.)
Owen, Dr. David (Plymouth, S'tn)


Craddock, George (Bradford, S.)
Howell, Denis (Small Heath)
Owen, Will (Morpeth)


Cronin, John
Hoy, James
Padley, Walter


Crossman, Rt. Hn. Richard
Huckfield, Leslie
Page, Derek (King's Lynn)


Cullen, Mrs. Alice
Hughes, Emrys (Ayrshire, S.)
Palmer, Arthur


Dalyell, Tam
Hughes, Roy (Newport)
Parkyn, Brian (Bedford)


Davidson, Arthur (Accrington)
Hunter, Adam
Pavitt, Laurence


Davies, Dr. Ernest (Stretford)
Jackson, Colin (B'h'se &amp; Spenb'gh)
Pearson, Arthur (Pontypridd)


Davies, G. Elfed (Rhondda, E.)
Jackson, Peter M. (High Peak)
Pentland, Norman


Davies, Harold (Leek)
Jeger,Mrs.Lena(H'b'n&amp;St.P'cras,S.)
Perry, George H. (Nottingham, S.)


Davies, Ifor (Gower)
Jenkins, Hugh (Putney)
Price, Christopher (Perry Barr)


Dell, Edmund
Johnson, Carol (Lewisham, S.)
Price, Thomas (Westhoughton)


Dempsey, James
Jones, Dan (Burnley)
Price, William (Rugby)


Dewar, Donald
Jones, J. Idwal (Wrexham)
Probert, Arthur


Dickens, James
Jones, T. Alec (Rhondda, West)
Randall, Harry


Doig, Peter
Kelley, Richard
Rees, Merlyn


Dunnett, Jack
Kerr, Dr. David (W'worth, Central)
Roberts, Albert (Normanton)


Dunwoody, Mrs. Gwyneth (Exeter)
Lawson, George
Rose, Paul


Dunwoody, Dr. John (F'th &amp; C'b'e)
Ledger, Ron
Ross, Rt. Hn. William


Eadie, Alex
Lee, Rt. Hn. Frederick (Newton)
Rowlands, E. (Cardiff, N.)


Edwards, Rt. Hn. Ness (Caerphilly)
Lewis, Ron (Carlisle)
Shaw, Arnold (Ilford, S.)


Edwards, William (Merioneth)
Lomas, Kenneth
Sheldon, Robert


Ellis, John
Lyon, Alexander W. (York)
Short, Mrs. Renée(W'hampton,N.E.)


Ennals, David
McBride, Neil
Silverman, Julius (Aston)


Ensor, David
MacDermot, Niall
Skeffington, Arthur


Evans, Ioan L. (Birm'h'm, Yardley)
Macdonald, A. H.
Spriggs, Leslie


Faulds, Andrew
McGuire, Michael
Stonehouse, John


Fernyhough, E.
Mackenzie, Gregor (Rutherglen)
Tinn, James


Finch, Harold
Mackintosh, John P.
Urwin, T. W.


Fletcher, Ted (Darlington)
McMillan, Tom (Glasgow, C.)
Wainwright, Edwin (Dearne Valley)


Ford, Ben
Macpherson, Malcolm
Walker, Harold (Doncaster)


Forrester, John
Mahon, Peter (Preston, S.)



Freeson, Reginald
Mapp, Charles
Watkins, David (Consett)


Galpern, Sir Myer
Marks, Kenneth
Watkins, Tudor (Brecon &amp; Radnor)


Gardner, Tony
Marquand, David
Weitzman, David


Garrett, W. E.
Marsh, Rt. Hn. Richard
Wellbeloved, James


Gourlay, Harry
Mason, Roy
Whitaker, Ben


Gray, Dr. Hugh (Yarmouth)
Mendelson, J. J.
Whitlock, William


Grey, Charles (Durham)
Mikado, Ian
Wilkins, W. A.


Griffiths, David (Rother Valley)
Miller, Dr. M. S.
Williams, Alan (Swansea, W.)


Griffiths, Rt. Hn. James (Llanelly)
Milne, Edward (Blyth)
Williams, Clifford (Abertillery)


Griffiths, Will (Exchange)
Mitchell, R. C. (S'th'pton, Test)
Williams, Mrs. Shirley (Hitchin)


Hamilton, James (Bothwell)
Morgan, Elystan (Cardiganshire)
Willis, George (Edinburgh, E.)


Hamilton, William (Fife, W.)
Morris, Charles R (Openshaw)
Wilson, William (Coventry, S.)


Hamling, William
Mulley, Rt. Hn. Frederick
Winnick, David


Hannan, William
Murray, Albert
Woof, Robert


Harper, Joseph
Neal, Harold
Yates, Victor


Harrison, Walter (Wakefield)
Norwood, Christopher



Haseldine, Norman
Ogden, Eric
TELLERS FOR THE AYES:


Hilton, W. S.
O'Malley, Brian
Mr. Eric G. Varley and


Hooley, Frank
Orbach, Maurice
Mr. William Howie.


Horner, John
Orme, Stanley





NOES


Atkins, Humphrey (M't'n &amp; M'd'n)
Doughty, Charles
Jones, Arthur (Northants, S.)


Awdry, Daniel
Drayson, G. B.
Jopling, Michael


Baker, W. H. K.
Elliot, Capt. Walter (Carshalton)
Kimball, Marcus


Balniel, Lord
Elliott,R.W.(N'c't1e-upon-Tyne,N.)
King, Evelyn (Dorset, S.)


Bennett, Dr. Reginald (Gos, &amp; Fhm)
Emery, Peter
Kitson, Timothy


Bessell, Peter
Farr, John
Knight, Mrs. Jill


Black, Sir Cyril
Fortescue, Tim
Lancaster, Col. C. G.


Blaker, Peter
Galbraith, Hon. T. G.
Lane, David


Boardman, Tom
Gibson-Watt, David
Lewis, Kenneth (Rutland)


Boyd-Carpenter, Rt. Hn. John
Glyn, Sir Richard
Loveys, W. H.


Braine, Bernard
Gower, Raymond
Lubbock, Eric


Brown, Sir Edward (Bath)
Grant, Anthony
MacArthur, Ian


Brown, Hugh D. (G'gow, Provan)
Gurden, Harold
Mackenzie, Alasdair(Ross&amp;Crom'ty)


Buchanan-Smith,Alick (Angus,N&amp;M)
Hall-Davis, A. G. F.
Maclean, Sir Fitzroy


Buck, Antony (Colchester)
Harris, Frederic (Croydon, N.W.)
Mawby, Ray


Burden, F. A.
Harrison, Brian (Maldon)
Maxwell-Hyslop, R. J.


Clegg, Walter
Harrison, Col. Sir Harwood (Eye)
Maydon, Lt.-Cmdr. S. L. C.


Cooke, Robert
Hastings, Stephen
Mills, Peter (Torrington)


Cooper-Key, Sir Neill
Hawkins, Paul
Mills, Stratton (Belfast, N.)


Cordle, John
Heald, Rt. Hn. Sir Lionel
Montgomery, Fergus


Costain, A. P.
Higgins, Terence L.
More, Jasper


Crowder, F. P.
Hiley, Joseph
Morgan, Geraint (Denbigh)


Dalkeith, Earl of
Holland, Philip
Morrison, Charles (Devizes)


Dance, James
Hunt, John
Munro-Lucas-Tooth, Sir Hugh


Davidson, James(Aberdeenshire, W.)
Hutchison, Michael Clark
Nabarro, Sir Gerald


Dean, Paul (Somerset, N.)
Iremonger, T. L.
Nicholls, Sir Harmar


Deedes, Rt. Hn. W. F. (Ashford)
Irvine, Bryant Godman (Rye)
Onslow, Cranley







Osborn, John (Hallam)
Silvester, Frederick
Walker, Peter (Worcester)


Page, John (Harrow, W.)
Sinclair, Sir George
Ward, Dame Irene


Percival, Ian
Smith, John
Whitelaw, Rt. Hn. William


Peyton, John
Steel, David (Roxburgh)
Weatherill, Bernard


Pink, R. Bonner
Stoddart-Scott, Col. Sir M. (Ripon)
Webster, David


Powell, Rt. Hn. J. Enoch
Summers, Sir Spencer
Wills, Sir Gerald (Bridgwater)


Pym, Francis
Taylor,Edward M.(G'gow,Cathcart)
Woodnutt, Mark


Ramsden, Rt. Hn. James
Thatcher, Mrs. Margaret
Worsley, Marcus


Rees-Davies, W. R.
Tilney, John
Younger, Hn. George


Ridley, Hn. Nicholas
Turton, Rt. Hn. R. H.
TELLERS FOR THE NOES:


Robson Brown, Sir William
van Straubenzee, W. R.
Mr. Reginald Eyre and


Rossi, Hugh (Hornsey)
Wainwright, Richard (Colne Valley)
Mr. Hector Monro.


Scott, Nicholas

Question put accordingly, That the Amendment be made:—

The Committee divided: Ayes 115, Noes 181.

Division No. 9.]
AYES
[10.43 p.m.


Atkins, Humphrey (M't'n &amp; M'd'n)
Hall-Davis, A. G. F.
Onslow, Cranley


Awdry, Daniel
Harris, Frederic (Croydon, N.W.)
Osborn, John (Hallam)


Baker, W. H. K.
Harrison, Brian (Maldon)
Page, John (Harrow, W.)


Balniel, Lord
Harrison, Col. Sir Harwood (Eye)
Percival, Ian


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Hastings, Stephen
Peyton, John


Bessell, Peter
Hawkins, Paul
Pink, R. Bonner


Black, Sir Cyril
Heald, Rt. Hn. Sir Lionel
Powell, Rt. Hn. J. Enoch


Blaker, peter
Higgins, Terence L.
Pym, Francis


Boardman, Tom
Hiley, Joseph
Ramsden, Rt. Hn. James


Boyd-Carpenter, Rt. Hn. John
Hill, J. E. B.
Rees-Davies, W. R.


Braine, Bernard
Holland, Philip
Ridley, Hn. Nicholas


Brown, Sir Edward (Bath)
Hunt, John
Robson Brown, Sir William


Bruce-Gardyne, J.
Hutchison, Michael Clark
Rossi, Hugh (Hornsey)


Buchanan-Smith, Alick( Angus, N&amp;M)
Jones, Arthur (Northants, S.)
Scott, Nicholas


Buck, Antony (Colchester)
Jopling, Michael
Silvester, Frederick


Burden, F. A.
Kimball, Marcus
Sinclair, Sir George


Clegg, Walter
King, Evelyn (Dorset, S.)
Smith, John


Cooke, Robert
Kitson, Timothy
Steel, David (Roxburgh)


Cooper-Key, Sir Neill
Knight, Mrs. Jill
Stoddart-Scott, Col. Sir M. (Ripon)


Cordle, John
Lancaster, Col. C. G.
Summers, Sir Spencer


Costain, A. P.
Lane, David
Taylor,Edward M.(G'gow,Cathcart)


Crowder, F. P.
Lewis, Kenneth (Rutland)
Thatcher, Mrs. Margaret


Dalkeith, Earl of
Loveys, W. H.
Tilney, John


Dance, James
Lubbock, Eric
Turton, Rt. Hn. R. H.


Davidson, James( Aberdeenshire, W.)
MacArthur, Ian
van Straubenzee, W. R.


Dean, Paul (Somerset, N.)
Mackenzie, Alasdair(Ross&amp;Crom'ty)
Wainwright, Richard (Colne Valley)


Deedes, Rt. Hn. W. F. (Ashford)
Maclean, Sir Fitzroy
Walker, Peter (Worcester)


Doughty, Charles
Mawby, Ray
Ward, Dame Irene


Drayson, G. B.
Maxwell-Hyslop, R. J.
Weatherill, Bernard


Elliot, Capt. Walter (Carshalton)
Maydon, Lt.-Cmdr. S. L. C.
Webster, David


Elliott,R.W.(N'c'tle-upon-Tyne,N.)
Mills, Peter (Torrington)
Whitelaw, Rt. Hn. William


Emery, Peter
Mills, Stratton (Belfast, N.)
Wills, Sir Gerald (Bridgwater)


Farr, John
Monro, Hector
Woodnutt, Mark


Fortescue, Tim
Montgomery, Fergus
Worsley, Marcus


Galbraith, Hon. T. G.
More, Jasper
Younger, Hn. George


Gibson-Watt, David
Morgan, Geraint (Denbigh)



Glyn, Sir Richard
Morrison, Charles (Devizes)
TELLERS FOR THE AYES:


Gower, Raymond
Munro-Lucas-Tooth, Sir Hugh
Mr. Reginald Eyre and


Grimond, Rt. Hn. J.
Nabarro, Sir Gerald
Mr. Anthony Grant.


Gurden, Harold
Nicholls, Sir Harmar





NOES


Albu, Austen
Buchan, Norman
Dickens, James


Allaun, Frank (Salford, E.)
Buchanan, Richard (G'gow, Sp'burn)
Doig, Peter


Archer, Peter
Cant, R. B.
Dunnett, Jack


Armstrong, Ernest
Carter-Jones, Lewis
Dunwoody, Mrs. Gwyneth (Exeter)


Atkins, Ronald (Preston, N.)
Coleman, Donald
Dunwoody, Dr. John (F'th &amp; C'b'e)


Atkinson, Norman (Tottenham)
Concannon, J. D.
Eadie, Alex


Barnett, Joel
Conlan, Bernard
Edwards, Rt. Hn. Ness (Caerphilly)


Baxter, William
Craddock, George (Bradford, S.)
Edwards, William (Merioneth)


Beaney, Alan
Cronin, John
Ellis, John


Bence, Cyril
Crossman, Rt. Hn. Richard
Ennals, David


Benn, Rt. Hn. Anthony Wedgwood
Cullen, Mrs. Alice
Ensor, David


Bidwell, Sydney
Dalyell, Tam
Evans, Ioan L. (Birm'h'm, Yardley)


Bishop, E. S.
Davidson, Arthur (Accrington)
Faulds, Andrew


Blackburn, F.
Davies, Dr. Ernest (Stratford)
Fernyhough, E.


Blenkinsop, Arthur
Davies, G. Elfed (Rhondda, E.)
Finch, Harold


Booth, Albert
Davies, Harold (Leek)
Fletcher, Ted (Darlington)


Boston, Terence
Davies, Ifor (Gower)
Ford, Ben


Braddock, Mrs. E. M.
Dell, Edmund
Forrester, John


Brooks, Edwin
Dempsey, James
Freeson, Reginald


Brown, Bob (N'c'tle-upon-Tyne, W.)
Dewar, Donald
Galpern, Sir Myer




Gardner, Tony
Lomas, Kenneth
Price, Christopher (Perry Barr)


Garrett, W E.
Lyon, Alexander W. (York)
Price, Thomas (Westhoughton)


Gourlay, Harry
McBride, Neil
Price, William (Rugby)


Gray, Dr. Hugh (Yarmouth)
MacDermot, Niall
Probert, Arthur


Grey, Charles (Durham)
Macdonald, A. H.
Randall, Harry


Griffiths, David (Rother Valley)
McGuire, Michael
Rees, Merlyn


Griffiths, Rt. Hn. James (Lianelly)
Mackenzie, Gregor (Rutherglen)
Roberts, Albert (Normanton)


Griffiths, Will (Exchange)
Mackintosh, John P.
Rose, Paul


Hamilton, James (Bothwell)
McMillan, Tom (Glasgow, C.)
Ross, Rt. Hn. William


Hamilton, William (Fife, W.)
MacPherson, Malcolm
Rowlands, E. (Cardiff, N.)


Hamling, William
Mahon, Peter (Preston, S.)
Shaw, Arnold (Ilford, S.)


Hannan, William
Mapp, Charles
Sheldon, Robert


Harper, Joseph
Marks, Kenneth
Short, Mrs. Renée(W'hampton,N.E.)


Harrison, Walter (Wakefield)
Marquand, David
Silverman, Julius (Aston)


Haseldine, Norman
Marsh, Rt. Hn. Richard
Skeffington, Arthur


Hilton, W. S.
Mason, Roy
Spriggs, Leslie


Hooley, Frank
Mendelson, J. J.
Stonehouse, John


Horner, John
Mikardo, Ian
Swain, Thomas


Houghton, Rt. Hn. Douglas
Miller, Dr. M. S.
Tinn, James


Howarth, Robert (Bolton, E.)
Milne, Edward (Blyth)
Urwin, T. W.


Howell, Denis (Small Heath)
Mitchell, R. C. (S'th'pton, Test)
Wainwright, Edwin (Dearne Valley)


Hoy, James
Morgan, Elystan (Cardiganshire)
Walker, Harold (Doncaster)


Huckfield, Leslie
Morris, Charles R. (Openshaw)
Watkins, David (Consett)


Hughes, Emrys (Ayrshire, S.)
Mulley, Rt. Hn. Frederick
Watkins, Tudor (Brecon &amp; Radnor)


Hughes, Roy (Newport)
Murray, Albert
Weitzman, David


Hunter, Adam
Neal, Harold
Wellbeloved, James


Jackson, Colin (B'h'se &amp; Spenb'gh)
Norwood, Christopher
Whitaker, Ben


Jackson, Peter M. (High Peak)
Ogden, Eric
Whitlock, William


Jeger,Mrs.Lena(H'b'n&amp;St.P'cras,S.)
O'Malley, Brian
Wilkins, W. A.


Jenkins, Hugh (Putney)
Orbach, Maurice
Williams, Alan (Swansea, W.)


Johnson, Carol (Lewisham, S.)
Orme, Stanley
Williams, Clifford (Abertillery)


Jones, Dan (Burnley)
Oswald, Thomas
Williams, Mrs. Shirley (Hitchin)


Jones, J. Idwal (Wrexham)
Owen, Dr. David (Plymouth, S'tn)
Willis, George (Edinburgh, E.)


Jones, T. Alec (Rhondda, West)
Owen, Will (Morpeth)
Wilson, William (Coventry, S.)


Kelley, Richard
Padley, Walter
Winnick, David


Kerr, Mrs. Anne (R'ter &amp; Chatham)
Page, Derek (King's Lynn)
Woof, Robert


Kerr, Dr. David (W'worth, Central)
Palmer, Arthur
Yates, Victor


Kerr, Russell (Feltham)
Parkyn, Brian (Bedford)



Lawson, George
Pavitt, Laurence
TELLERS FOR THE NOES:


Ledger, Ron
Pearson, Arthur (Pontypridd)
Mr. Eric G. Varley and


Lee, Rt. Hn. Frederick (Newton)
Pentland, Norman
Mr. William Howie.


Lewis, Ron (Carlisle)
Perry, George H. (Nottingham, S.)

Mr. Peyton: I beg to move Amendment No. 4, in page 1, line 12, leave out subsection (2).
As is my custom, I think that I can do this with great brevity. It would be possible, subject to any guidance which you, Sir Eric, might see fit to give to the Committee, for the same arguments as were appropriate to the first Amendment to be repeated on this one.

The Chairman: Since the hon. Member asks for my guidance, it might be convenient if I indicate to the Committee that that is not the case. This Amendment is very much narrower, and the debate on it will be much more restricted.

Mr. Peyton: Sir Eric, I think that you misunderstood me. I did not ask for your guidance. I said that the opinion which I was expressing was subject to any guidance which you might see fit to offer. That is quite different. As all hon. Gentlemen opposite know, asking for guidance is something which I would never be foolish enough to do, unless I was in great straits.
The point here is really explained by the wording in the Explanatory and Financial Memorandum, which says in paragraph 2:
It also raises from £30 million to £50 million the limit imposed by section 1 (4)(b) of the 1965 Act on the amount of accumulated deficit which may be financed by temporary borrowings.
It is true that the Committee now comes down from the level at which it has lately been considering figures. On the last Amendment we were dealing with £900 million, so it is quite a relief to come down to the small change of £30 million or £50 million. Nevertheless, I think that we are entitled to ask the Minister for some explanation. I am sure that the hon. Member for Derbyshire, North-East (Mr. Swain) who takes such an interest in these matters will wish to pay attention to this most important debate.

Mr. Swain: I am listening, very seriously. I merely smiled not at the content of the hon. Member's speech, but at a fourth-rate comic trying to play Hamlet.

Mr. Peyton: I am not quite sure how long the hon. Member is seeking to pro-

long the discussion on the Bill he is so anxious to support, but it is nice to hear these civil interjections, which I realise are done with all that polished courtesy for which the hon. Gentleman is well known.
If I can now get back to the subject of the contents of the Bill, I would just say that I think we are entitled to some reasonable answer telling us why the Coal Board needs this extra £20 million on its borrowing powers for temporary purchases. I hope that the brevity of my remarks will not lead the Parliamentary Secretary to think that he can avoid this issue with some vague generalities.

Sir G. Nabarro: The issues here are much wider than denoted by the hon. Member for Yeovil (Mr. Peyton), and I rise therefore to support him a little more powerfully than I have done on earlier occasions. [Interruption.] The hon. Member for Feltham (Mr. Russell Kerr) who has just joined our debates for the first time today—

Mr. Russell Kerr (Felham): No.

Sir G. Nabarro: The hon. Gentleman shouts at me "another comic turn". Perhaps he will give me a few minutes to talk about the finances of the Coal Board and judge then how comic I am in my attribution of deficits to mismanagement by the Board.

Mr. Kerr: That shows how comic you were a long time ago.

Sir G. Nabarro: Sir Eric, I heard the hon. Member refer to you as being a comic. I hope that if I resume my seat you will put him into good order.

The Chairman: Order. If the hon. Gentleman did make that remark and address it to me I hope he will withdraw it.

Mr. Kerr: I do so unreservedly, Sir Eric. As you will gather it was directed at another hon. Member of this House.

Mr. Stephen Hastings (Mid-Bedfordshire): On a point of order, Sir Eric. Is it in order for the hon. Gentleman to refer to my hon. Friend as a comic turn?

The Chairman: Order. I have heard similar expressions used in the House before.

Sir G. Nabarro: These ribald and irrelevant interjections from sedentary hon. Members opposite are, of course, merely protracting our proceedings. I can make speeches of very great length on deficit financing if I am called upon to do so. I will, however, be relatively brief this evening as long as I am given a continuously quiet hearing without sedentary interruptions from hon. Gentlemen opposite.
I shall powerfully reinforce what the hon. Member for Yeovil has said. There is an extraordinary contradistinction in the financial fortunes of the Board, comparing last year with the projected deficit during the next two years.
I said in the immediately preceding debate that the Coal Board had almost broken even in the last couple & of years on its current account, and in this subsection (2) it is providing for a deficit of £50 million over the length of life of operations which will flow from this Bill.
That length of life, in the immediately preceding Amendment, I put at 16 months. The Minister thinks it is a bit longer. He muttered "1971" on one occasion. But it will not be 1971 or anything like it; it is much more likely to be 1969. Hon. Members representing mining constituencies will agree here. If it is 1969, that is two years ahead. We are budgeting, in effect, for a deficit of £50 million over two years, which represents a loss of about £25 million per annum on current account.
But the Coal Board has been almost breaking even. To quote from paragraph I of the Board's Report and Accounts for 1966–67, that is the last chargeable period ended 31st May last:
Operating profit on the Board's activities in 1966–67 amounted to £28·5 million. Interest paid was £28·2 million and the surplus on the Board's accounts was £0·3 million.
of £300,000 profit on a year's operations.
How is it then that subsection (2) now talks about an annual deficit of £20 million or £25 million in each of the two years of the duration of the operations flowing from the Bill, whereas, in the last full year, the Board made a small profit? What has caused this dramatic change in

its financial operations? To quote from paragraph 2 of the Report and Accounts:
The improvement in the industry's results was largely due to a surge in output and productivity in the latter part of the year. In their Report for 1965–66, the Board said (see paragraph 24) that too rapid a rundown in manpower might prevent the industry from realising its full potential.
But a purpose of the Bill is to prevent any acceleration in the rundown of manpower, and one would therefore suppose that the financial achievements of the Board in each of the next two years should be not less favourable than that in the year ended 31st March, 1966.
Effectively and shortly, how does the Parliamentary Secretary account for the fact that, in this short period of 12 to 18 months, there should be a turnover from a small profit to a large deficit of possibly £20 million to £25 million, with a rundown of manpower in the coming two years which is said to be at a rate not larger than the rundown in the last full year?
My second question flows from the intervention of the hon. Member for Derbyshire, North-East (Mr. Swain) in the Minister's speech on the previous Amendment, about opencast coal. It is notorious financially that opencast operations are extremely profitable. The Report and Account says:
The Board's opencast production made an operating profit of £7·5 million, or 22s. 2d. a ton. The average cost of production was 80s. 7d. a ton.
That last price for opencast coal compares with 100s. 7d. a ton, average pithead price, for deep-mined coal, so opencast coal is reported £1 a ton cheaper, and, on a very limited output of only a few million tons, the Board made the huge profit of £7·5 million on opencast operations last year.
It follows from that that if the deficit budgeting for each of the two forthcoming years is about £25 million a year, and if there is to be a profit on opencast mining of £7·5 million a year, the real loss envisaged on deep-mined coal is £32·5 million a year in each of the two years ahead covered by the Bill.

Mr. J. D. Concannon: The profit on opencast mining mentioned by the hon. Gentleman is before interest has been paid, and, of course, 25 per cent.


of the total amount of deep-mined coal is produced at 77s. 9d. a ton, which is below the opencast sum.

Sir G. Nabarro: I do not dispute that and I will not conduct an analytical survey of mining figures. I repeat that the average pithead price of deep-mined coal in Britain is 100s. 7d. a ton, based on last year's activities, while the average price of opencast coal, based on last year's activities, was 80s. 7d. a ton. The two are strictly comparable figures.
What has caused this dramatic change in the financial fortunes of the Board? Whereas in 1966–67, after meeting all charges and after paying a very heavy interest charge, the Board still turned in a tiny profit of £300,000. In this Measure we are talking about a deficit of a maximum of £50 million at the end of any chargeable accounting period flowing from the Bill's operations. That is much too big a change-over from profit to loss to pass unnoticed and unchallenged. I therefore warmly support my hon. Friend the Member for Yeovil and congratulate him, as always, on his Parliamentary perspicacity in tabling the Amendment.

Mr. Russell Kerr: Now lick him all over.

Sir G. Nabarro: The hon. Gentleman is both indelicate and vulgar. As a protest against his continued sedentary interventions in what was intended to be an important financial contribution to our deliberations, I resume my seat.

The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson): I will reply to some of the points raised by the two hon. Gentlemen opposite. I will deal with the questions asked by the hon. Member for Worcestershire, South (Sir G. Nabarro) first and, in doing so, I will confine my remarks to the matters in question and try to avoid elaboration by adjective.
The hon. Member for Worcestershire. South asked for reasons for the change in the Board's financial position from a £0·3 million surplus last year to a position in which we shall have to budget or allow for continuing deficits over the next few years. The hon. Gentleman quoted at some length from the Board's last Annual Report. Had he continued

to quote from the same series of paragraphs he would have been able to indicate in some detail the answer to his own question.
He quoted from paragraphs 1 and 2. Paragraph 3 refers to the effects on the industry's finances of the recession in the economy and an exceptionally mild winter. It goes on to refer to increased expenditure on materials, stores, power supplies, local rates and so on.
It also refers to the additional expenditure in which the Board was involved as a result of the National Union of Seamen's strike last year in putting to stock and later picking up over 1½ million tons of coal and coke. These were some of a whole series of factors which were forecast last year in the Board's Annual Report as affecting the Board's finances.

Mr. Edwin Wainwright: When the hon. Gentleman refers to increases in prices, was he quoting an increased amount of materials obtained from private enterprise, or did the price go up for the machinery being sold?

Mr. Freeson: I understand that the Board was referring to increased costs, and not the increased quantities, as such. Those are the reasons specified, and they are reasons which one has to repeat in explaining the changing situation.
A question was then put about deep mining, as compared with opencasting, and the Annual Report to which reference has been made gives just the information for which the hon. Member was, in fact, asking. If he would look at the paragraph preceding that from which he quoted about opencast mining, he will see that on page 2 it is stated:
The operating profit at the Board's collieries was £17·7 millions or 2s. 2d. a ton. The average cost of production was 98s. 5d. a ton.
Then there is a table of figures showing costs.
I should like to go back to the first point which was made by the hon. Member who moved the Amendment who asked in general terms for an explanation of the increased figure which he sought to reduce by the Amendment. The object of the increase is to make provision for covering possible deficits in the current year and up to 1970–71. After the capital reconstruction authorised under the 1965 Act, the Board aimed to


earn each year a revenue surplus of £10 millions. This would have been used to bridge the gap, and in 1966–67—the first year—the surplus amounted to £300,000. On present trends, however, there may be a deficit of £10 millions this year, although the revenue earned up to 1970–71 will depend upon coal price policy, policies about uneconomic pits, and matters which cannot be calculated accurately in advance.

Mr. Lubbock: Why is there this worsening position from a profit of £300,000 last year to a deficit of £10 millions this year?

Mr. Freeson: The Board was indicating the worsening position in which it was and—

Mr. Lubbock: The hon. Gentleman said that certain factors had affected the Board adversely, but paragraph 3 of the Report states quite clearly that
Other factors contributed to the improved linances of the industry".

Sir G. Nabarro: I do not wish to weary the Committee by giving lengthy quotations from the Report, but the hon. Gentleman opposite might have put matters into better balance—into correct balance—by quoting from the first page of the Report,
The financial position of the industry was, however, strengthened by the continuing effects of the capital reconstruction announced in November, 1965".
I would remind the Committee what that capital reconstruction was. It was the writing off of many millions of accumulated losses and it was that which enabled the Board to go into the "black" in a normal operating year rather than to stay in the "red". I must say that this is a most curious time to announce a deficit of £10 million, post-devaluation, after a profit last year.

11.15 p.m.

Mr. Freeson: A series of non sequiturs is being put by the hon. Gentleman—[HON. MEMBERS: "No."] I repeat—it is a non sequitur. Unfortunately, the hon. Member will keep quoting just little bits and pieces from paragraphs when he should deal with the full context. The financial strengthening to which he referred when speaking of the last Annual Report of the Board was connected with internal financial arrangements, as the rest of the paragraph from which he

quoted makes quite clear. However, I do not intend to pursue this matter in any great detail, as it is not particularly germane to the question before us—

Sir Harmar Nicholls: rose—

Mr. Freeson: No. I was saying in answer to the first point raised by the hon. Member for Yeovil that in view of the difficulty—

Sir Harmar Nicholls: On a point of order, Sir Eric. Are we not in Committee, and is not the whole object of the Committee stage to allow these things to be examined in detail? Is it right for the Parliamentary Secretary to resist our convention, and not allow himself to be cross-examined?

The Chairman: The Minister decides in his own discretion when he will give way and when he will not.

Mr. Freeson: Perhaps I might be allowed to answer the points put to me by the hon. Member for Yeovil. I was saying that in view of the difficulties facing the Board in the next few years, it is necessary to provide for a possible deficit of the kind to which I have referred—[Interruption.]

The Chairman: Order. We really cannot go on if we have sedentary interruptions on both sides. Mr. Freeson.

Mr. Freeson: rose—

Mr. G. Elfed Davies: Will my hon. Friend give way for a moment? If he were a collier, he would suggest to the hon. Member for Peterborough (Sir Harmar Nicholls), that he should get in the manhole out of the way.

Mr. Freeson: As a matter of fact, if the hon. Gentleman would contain himself, I was about, at the end of the sentence, to resume my seat.

Sir Harmar Nicholls: If the Parliamentary Secretary accuses my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) of muddying the waters by not explaining the position clearly, he is in a position to straighten it out. Can he explain—whether or not his hon. Friends want the information, I do not know—why we have this acceleration of the deficit from £0·3 million to £10 million? It should be on the record, so that we can know.

Mr. Freeson: I am accusing no one of muddying the waters, but I would refer the hon. Member to the latest Report of the Board—[HON. MEMBERS: "He has not read it."]
To return to the original general point put to me by the hon. Member for Yeovil, I would say that in view of the difficulties we are expecting the N.C.B. to face over the next few years we must provide for the possible deficit that may arise. The sum included must be related in our minds, as well as in practice, to a turnover that will be more than £800 million a year. Over the four years in question, the £50 million laid down in the Bill represents less than 1½ per cent. of turnover.
I have tried as best I can to give the reasons for the changing position. Without going into an accountancy exercise which it would not be my responsibility to undertake this evening, I have tried to give some of the general reasons for which the hon. Member for Yeovil asked.

Mr. W. Baxter: Cannot my hon. Friend give a better explanation why we should permit to be written into the Bill a proposition that there will be a deficit in an undertaking which should be showing a profit and which, if it were run on a businesslike basis, would show a substantial one?

Mr. Freeson: I refer my hon. Friend to the Annual Report, where he will see stated at some length the reasons for the changing position. I have referred to these. This Bill deals with the situation facing the industry. I ask the Committee to resist the Amendment.

Sir Harmar Nicholls: I had not intended to speak—[HON. MEMBERS: "Oh."]—and I do not want to speak on the detailed terms of the Amendment.

Mr. J. J. Mendelson: The hon. Member knows nothing about it.

Sir Harmar Nicholls: I know enough about it to know that we are being fobbed off by a very inept Parliamentary performance. It is not just a matter of criticising the Parliamentary Secretary; there are certain rights which Parliament must insist upon.

Mr. Swain: rose—

Sir Harmar Nicholls: I will give way to the hon. Member for Derbyshire, North-East (Mr. Swain) in a moment because he does know what he is talking about. When the Parliamentary Secretary has questions put to him to explain the deficit, which is of some importance to this nation, he should not try to put us off by asking us to read the Report. The whole object is for him to explain the Report as he sees it. Whether we have read the Report or not is irrelevant. Parliament does not insist that hon. Members must read all the reports placed before them, but when a Minister is responsible he is asked for a summary of reports and Members of Parliament are entitled to an answer. We have not had that.

Mr. Swain: I thank the hon. Member for giving way. I remind him that if he did not consume so much natural gas produced by his hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) he might be able to understand these things better.

Sir Harmar Nicholls: The hon. Member referred to natural gas, but his hon. Friend accused my hon. Friend of using unnatural gas.
The Parliamentary Secretary is entitled to speak again without leave being given. He should give his version of how this deficit has come about.

Mr. Edwin Wainwright: I wish to say a few words because it seems that the hon. Member for Peterborough (Sir Harmar Nicholls) spoke in temper and was not rational in his approach to this problem.
Whether the Coal Board made a profit this year, last year or the year before, can be checked by the Accounts. In the Accounts we find that the income of the Board fluctuates each year. In 1966–67 it was up by £40 million on the year before and in the year before that it was up by £46 million on the previous year. Obviously the Board and the Government expect that this next year there will be a drop in the income of the Board. If we sell less coal the income is bound to go down. If we increase capital investments to make sure that the industry is more efficient, that will cost more. If the amount of coal produced is less, the average burden per ton is greater.
If the Opposition want to restrict the amount of money allocated to the Board to make it more difficult for it to carry on, the Opposition must remember that the industry is going along a tortuous path. We are dealing with human beings. If the Opposition want pit closures to come more rapidly so that less coal is produced, that will make it more difficult to cater for the men who will be displaced. Those men have to be looked after. When the demand for coal was greater than the supply the nation's industries had cheap coal, and the Coal Board was not allowed by the Tory Government to put up its prices, and it could not build up its reserves. Now that there is an excessive amount of coal it is up to the Government and the Opposition to try to help the industry and the men in it, to make certain that there is no great hardship to individuals. I hope that the Opposition will treat the matter more humanely and not with tongue in cheek as they are treating it at present.

Mr. Paul Hawkins: I want only to make two small points. I did not intend to intervene. I know that it is strange for an hon. Member for an agricultural constituency to start talking about coal, but my constituents have to pay towards the deficit. We should have a better explanation than we have had. I do not see why every back-bencher is expected to read Reports of the Coal Board, the Ministry of Agriculture, and so on, on every subject.

Mr. Swain: rose—

Mr. Ogden: rose—

Mr. Hawkins: I do not intend to give way.
East Anglia suffers from receiving nothing but bad coal. If we are to have to pay towards the deficit, we should receive decent coal.

Mr. G. Elfed Davies: rose—

Mr. Hawkins: The industry is going through a very difficult period. The miners must be treated properly, and I recognise that there will be a big deficit for some years. But back-benchers are entitled to a proper explanation for the loss.

Mrs. Thatcher: I shall be brief. I had intended to intervene, and I have read the relevant Reports.
In the 1965 Act we wrote off an accumulated revenue deficit of £91 million, in order that the Coal Board might start with a clean slate, and there was also provision for a £30 million deficit to last the rest of the lifetime of the Act. After that, the National Board for Prices and Incomes granted a price increase M the following terms:
The National Coal Board have proposed increases in the pithead price of coal in order to recover an estimated deficit of £80 million in 1966–67 and to meet the prospect of greater deficits thereafter.
The accumulated deficit was written off and a price increase was given to meet all prospective deficits, in spite of which there was still a saving clause of a permissible deficit of £30 million. No reasoning that we have yet heard has been sufficient to increase that amount of deficit in the face of the price increase given, and I hope that my hon. Friend will press the Amendment to a Division.

Mr. G. Elfed Davies: I should not have intervened but for the remarks of the hon. Member for Norfolk, South-West (Mr. Hawkins). It was highly impertinent of him to say, "I am from an agricultural constituency and my people pay their price for coal". Miners have paid subsidies to agriculturists for many years. It is an insult to the House and to the miners for a remark of that kind to come from the hon. Member opposite. It would have been far better had he not come into the Chamber at the last moment to listen to the debate.
We must realise that we are dealing with a grave problem for the industry. The Amendment would leave out a subsection which deals with many matters which are important for the industry and I recommend hon. Members to vote against it.

11.30 p.m.

Mr. Peyton: May I say a few words? I was surprised that the Amendment brought out from the Parliamentary Secretary, almost as a chance aside, that it was too bad but there might be a loss of £10,500,000 this year. He said that there had been difficulties, and even the strike of the National Union of Seamen


was trotted out, with one or two other things like that.
This microcosm of a discussion on this question is abundant justification for the attitude of the Opposition to these matters. I profoundly believe that this country will never come to its senses or have any chance of getting out of its present mess while it is prepared to continue in this, the central form of Government, the attitude of levity towards many millions of pounds which have to be hard earned by someone else.
I do not wish to be too rough with the Parliamentary Secretary, but he must stand condemned for what appeared to be, at least from this side, a very flippant answer to a serious question. I have no difficulty or diffidence whatever in echoing everything which was said by my hon. Friend the Member for Finchley (Mrs. Thatcher) and I echo her advice that we should divide the Committee in protest.

Sir G. Nabarro: I spoke before my hon. Friend the Member for Yeovil (Mr. Peyton) and at a good deal greater length. I had no idea, in supporting this Amendment, that it would wring from the reluctant lips of the Parliamentary Secretary a confession that the Board has lost nearly £11 million this year. I say unhesitatingly that the characteristics of the Coal Board finances today are profligate, casual, cavalier, and flippant. In the present economic troubles of the country the reply of the Parliamentary Secretary ought to be stigmatised for what it is—utterly disgraceful. Never shall I walk through the Lobbies with greater joy in my heart than tonight.

Mr. Ogden: The Parliamentary Secretary has come in for some extremely unfair criticism from the Opposition benches. When he is under fire from the Opposition at least he is sure of our support, although there may be differences between hon. Members on this side. These personal attacks were made upon him for refusing at 11.30 at night to give answers to questions which have already been answered since the debate started at 6.45 p.m. The questions were asked by hon. Members who rolled in late to ask questions to which they ought to know the answers.

Mr. Freeson: I was accused by the hon. Member for Yeovil (Mr. Peyton) of

being flippant. There is a good deal more flippancy from hon. Members opposite in their asides than there is from this side of the Committee, either from me or from my hon. Friends. It has been suggested that I gave no reasons for the changing financial position of the industry. Not only was I not offhand in my remarks but if hon. Members did not hear some of the reasons I gave they should read HANSARD tomorrow, because they will see that I referred to the source of information that is available to all hon. Members who wish to take part in a debate of this kind. [HON. MEMBERS: "It has nothing to do with it."] I wish hon. Members would not keep interrupting. "It has nothing to do with it." There have been many personal remarks about me and some unnecessary adjectives used by an hon. Member who has now left the Chamber.

Sir G. Nabarro: I have not left the Chamber. I am sitting here watching.

Mr. Freeson: I know that it is getting late and that the hon. Member for Worcestershire, South (Sir G. Nabarro) likes to entertain us from time to time but do not let us have too many shocks like his sitting on this side of the Committee.

Sir G. Nabarro: I was not. I was talking to an hon. Member.

Mr. Freeson: I want to refer back to some of the reasons I gave. It has been suggested that I am treating the matter in an offhand fashion. It has been stated clearly by the Coal Board—and I presume that hon. Members will accept these reasons—that the change in the financial position is because the industry had less results than expected from the increased prices; because of the recession in the economy; because of the exceptionally mild winter which affected coal sales last year; because of rising costs under a wide range of headings to which I referred and because of additional expenditure on stocking arising directly from the seamen's strike.
I referred in my speech to the general position of the industry. I was surprised at the rather over-intensive manner in which the hon. Lady was so quick to support the Amendment. She knows as well as we do, even if some of her hon. Friends do not—although she does not want to play it up too much—that the industry is in a serious transitional phase.
It is rightly important for the industry that costs in terms of productivity or efficiency, or whatever heading one chooses, should come into balance with sales, and with price levels in relation to other fuels. That is the difficulty the industry is facing. It is making tremendous efforts, successful and effective efforts, to increase productivity. There are, again, examples in the Report, which hon. Members should read—and I am not directing this advice to the hon. Lady but to some of the more vociferous interventionists.
There is abundant evidence in the Report of the effective action being taken by the industry to increase productivity and efficiency, which is going to make for sensible, sound and competitive price levels in future. We are catering in this Bill for a transitional period of years. That is what all this is about. That is the issue. Therefore, we have to accept that the industry is financially going to be out of balance during this transitional period. The hon. Lady herself said so. She said that even following the 1965 Act, before it was known about the increased prices, it was expected that there would be a £30 million deficit.
We are expecting to move into a more transitional period soon. [Laughter.] It is not a joke. I say to the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) that this is a serious situation. The industry is moving into a serious situation. We are aware of it and that is what the major debate is about. We have to assist the industry to get into a sound technical and economic position so that it can be competitive. That is why it is important to provide for the deficits which are bound to arise against the background I have described earlier and which I have now recapitulated.

Mr. Peter Emery: Will the Parliamentary Secretary answer one short question which I tried to suggest that he might answer before he concluded? He referred to a possible deficit during the current year of about £10 million. This is not in the Annual Report or in any information that we could previously have had. It is entirely new. Therefore, I want to make certain that we understood the hon. Gentleman clearly. Can he tell us how the £10 million is made up?

Mr. Freeson: As I indicated earlier, I am not in a position to give any makeup of the figure by any kind of accountancy exercise. If I did not make it clear before, I do so now. It is expected that this will be the range in the intervening years between now and 1971.

Mr. Edward M. Taylor: I was amazed at the Parliamentary Secretary's reply. He referred us to the Annual Report. He should appreciate that hon. Members on this side have read the Annual Report, in which we see the reasons why there was a profit of only just under £½ million last year.
Among the reasons given by the hon. Gentleman, he mentioned the recession in the economy, but that was in respect of 1966–67, a year in which a small profit was made. He referred to the mild winter. That was last year, not this year, when the hon. Gentleman expects a £10 million deficit. He referred to the effect of the seamen's strike. That was last year, not this year, when he is talking about a deficit. He referred to expenditure on the social cost of an accelerated colliery closure programme, but we are not to have an accelerated colliery closure programme.
Every one of the reasons given in the Annual Report explained why we had a profit of only £300,000. All those factors should result not in a loss this year, but in an improvement of the situation. The simple question asked by my hon. Friends the Members for Yeovil (Mr. Peyton) and Worcestershire, South (Sir G. Nabarro) and others was why there is a loss this year. All that the Parliamentary Secretary has done is to give a series of reasons, as outlined in the Annual Report, why we did not make a £10 million profit last year.
When we are being asked to approve a loss of £10 million, we should know the reason for it. That is the question which the hon. Gentleman has not answered. Every one of the reasons which he has given does not explain a loss of £10 million but explains why the result should be better. We will not have a seamen's strike this year, we may not have a mild winter and we may have an improvement in the economy. All these things should improve the position and


not worsen it. The least that we are entitled to from the Minister is a proper explanation.

Question put, That the Amendment be made:—

The Committee divided: Ayes 96, Noes 154.

Division No. 10.]
AYES
[11.43 p.m.


Awdry, Daniel
Grant, Anthony
Munro-Lucas-Tooth, Sir Hugh


Baker, W. H. K.
Gurden, Harold
Nabarro, Sir Gerald


Balniel, Lord
Hall-Davis, A. G. F.
Nicholls, Sir Harmar


Biffen, John
Harrison, Brian (Maldon)
Onslow, Cranley


Black, Sir Cyril
Harrison, Col. Sir Harwood (Eye)
Osborn, John (Hallam)


Blaker, Peter
Hastings, Stephen
Percival, Ian


Boardman, Thomas (Leicester, S.W.)
Hawkins, Paul
Peyton, John


Boyd-Carpenter, Rt. Hn. John
Higgins, Terence L.
Pink, R. Bonner


Brown, Sir Edward (Bath)
Hiley, Joseph
Powell, Rt. Hn. J. Enoch


Bruce-Gardyne, J.
Hill, J. E. B.
Pym, Francis


Buchanan-Smith, Alick (Angus,N&amp;M)
Holland, Philip
Ridley, Hn. Nicholas


Buck, Antony (Colchester)
Hunt, John
Rossi, Hugh (Hornsey)


Burden, F. A.
Hutchison, Michael Clark
Scott, Nicholas


Carr, Rt. Hn. Robert
Jones, Arthur (Northants, S.)
Silvester, Frederick


Clegg, Walter
Jopling, Michael
Sinclair, Sir George


Cooke, Robert
Kimball, Marcus
Smith, John


Cordle, John
King, Evelyn (Dorset, S.)
Steel, David (Roxburgh)


Crowder, F. P.
Knight, Mrs. Jill
Stoddart-Scott, Col. Sir M. (Ripon)


Dalkeith, Earl of
Lancaster, Col. C. G.
Summers, Sir Spencer


Davidson, James(Aberdeenshire,W.)
Lane, David
Taylor, Edward M.(G'gow,Cathcart)


Dean, Paul (Somerset, N.)
Lewis, Kenneth (Rutland)
Thatcher, Mrs. Margaret


Deedes, Rt. Hn. W. F. (Ashford)
Loveys, W. H.
Tilney, John


Doughty, Charles
Lubbock, Eric
Turton, Rt. Hn. R. H.


Drayson, G. B.
MacArthur, Ian
van Straubenzee, W. R.


Elliot, Capt. Walter (Carshalton)
Mackenzie, Alasdair(Ross&amp;Crom'ty)
Walker, Peter (Worcester)


Elliott,R.W.(N'c'tle-upon-Tyne,N.)
Maclean, Sir Fitzroy
Weatherill, Bernard


Emery, Peter
Mawby, Ray
Webster, David


Eyre, Reginald
Maxwell-Hyslop, R. J.
Whitelaw, Rt. Hn. William


Fair, John
Maydon, Lt.-Cmdr. S. L. C.
Worsley, Marcus


Fortescue, Tim
Mills, Stratton (Belfast, N.)
Younger, Hn. George


Gibson-Watt, David
Montgomery, Fergus
TELLERS FOR THE AYES:


Glyn, Sir Richard
More, Jasper
Mr. Timothy Kitson and


Gower, Raymond
Morrison, Charles (Devizes)
Mr. Hector Monro.




NOES


Albu, Austen
Edwards, Rt. Hn. Ness (Caerphilly)
Jones, Dan (Burnley)


Allaun, Frank (Salford, E.)
Edwards, William (Merioneth)
Jones, J. Idwal (Wrexham)


Archer, Peter
Ellis, John
Jones, T. Alec (Rhondda, West)


Armstrong, Ernest
Ennals, David
Keller, Richard


Atkinson, Norman (Tottenham)
Ensor, David
Kerr, Mrs. Anne (R'ter &amp; Chatham)


Barnett, Joel
Faulds, Andrew
Kerr, Dr. David (W'worth, Central)


Baxter, William
Fernyhough, E.
Kerr, Russell (Feltham)


Beaney, Alan
Finch, Harold
Lawson, George


Bence, Cyril
Fletcher, Ted (Darlington)
Ledger, Ron


Benn, Rt. Hn. Anthony Wedgwood
Ford, Ben
Lee, Rt. Hn. Frederick (Newton)


Bidwell, Sydney
Forrester, John
Lewis, Ron (Carlisle)


Bishop, E. S.
Freeson, Reginald
Lomas, Kenneth


Blackburn, F.
Gardner, Tony
Lyon, Alexander W. (York)


Blenkinsop, Arthur
Gourlay, Harry
McBride, Neil


Booth, Albert
Gray, Dr. Hugh (Yarmouth)
MacDermot, Niall


Boston, Terence
Griffiths, David (Rother Valley)
Macdonald, A. H.


Brooks, Edwin
Griffiths, Will (Exchange)
McGuire, Michael


Brown,Bob(N'c'tle-upon-Tyne,W.)
Hamilton, James (Bothwell)
Mackenzie, Gregor (Rutherglen)


Buchan, Norman
Hamling, William
Mackintosh, John P.


Buchanan, Richard (G'gow, Sp'burn)
Hannan, William
McMillan, Tom (Glasgow, C.)


Cant, R. B.
Harrison, Walter (Wakefield)
MacPherson, Malcolm


Carter-Jones, Lewis
Haseldine, Norman
Mahon, Peter (Preston, S.)


Coleman, Donald
Henig, Stanley
Marks, Kenneth


Concannon, J. D.
Hilton, W. S.
Marquand, David


Crossman, Rt. Hn. Richard
Hooley, Frank
Marsh, Rt. Hn. Richard


Cullen, Mrs. Alice
Horner, John
Mason, Roy


Dalyell, Tam
Howarth, Robert (Bolton, E.)
Mendelson, J. J.


Davidson, Arthur (Accrington)
Howell, Denis (Small Heath)
Mikardo, Ian


Davies, Dr. Ernest (Stretford)
Howie, W.
Miller, Dr. M. S.


Davies, G. Elfed (Rhondda, E.)
Hoy, James
Milne, Edward (Blyth)


Davies, Harold (Leek)
Huckfield, Leslie
Mitchell, R. C. (S'th'pton, Test)


Dell, Edmund
Hughes, Emrys (Ayrshire, S.)
Morgan, Elystan (Cardiganshire)


Dewar, Donald
Hunter, Adam
Morris, Charles R. (Openshaw)


Dickens, James
Jackson, Colin (B'h'se &amp; Spenb'gh)
Mulley, Rt. Hn. Frederick


Doig, Peter
Jackson, Peter M. (High Peak)
Murray, Albert


Dunnett, Jack
Jeger,Mrs.Lena(H'b'n&amp;St.P'cras,S.)
Neal, Harold


Dunwoody, Dr. John (F'th &amp; C'b'e)
Jenkins, Hugh (Putney)
Ogden, Eric


Eadie, Alex
Johnson, Carol (Lewisham, S.)
O'Malley, Brian




Orbach, Maurice
Ryan, John
Wellbeloved, James


Orme, Stanley
Shaw, Arnold (Ilford, S.)
Whitaker, Ben


Oswald, Thomas
Sheldon, Robert
Whitlock, William


Owen, Dr. David (Plymouth, S'tn)
Silverman, Julius (Aston)
Williams, Alan (Swansea, W.)


Page, Derek (King's Lynn)
Skeffington, Arthur
Williams, Clifford (Abertillery)


Palmer, Arthur
Spriggs, Leslie
Williams, Mrs. Shirley (Hitchin)


Pentland, Norman
Swain, Thomas
Willis, George (Edinburgh, E.)


Perry, George H. (Nottingham, S.)
Tavarne, Dick
Wilson, William (Coventry, S.)


Price, Christopher (Perry Barr)

Winnick, David


Price, William (Rugby)
Tinn, James
Woof, Robert


Probert, Arthur
Urwin, T. W.
Yates, Victor


Roberts, Albert (Normanton)
Wainwright, Edwin (Dearne Valley)



Rose, Paul
Walker, Harold (Doncaster)
TELLERS FOR THE NOES:


Ross, Rt. Hn. William
Watkins, David (Consett)
Mr. Eric G. Varley and


Rowlands, E. (Cardiff, N.)
Watkins, Tudor (Brecon &amp; Radnor)
Mr. Joseph Harper.

The Chairman: I think that Clause I has been adequately discussed and I therefore proposed to put the Question, That the Clause stand part of the Bill.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clause 2

(GRANTS IN CONNECTION WITH PIT CLOSURES.)

Mr. Peyton: I beg to move, Amendment No. 8, in page 2, line 10, leave out '£45,000,000' and insert '£40,000,000'.

The Chairman: With this can be discussed Amendment No. 43, in Schedule, page 6, line 22, leave out '£45,000,000' and insert '£40,000,000.'

Mr. Peyton: For the reasons given earlier, I would much prefer large sums of money not to be immediately voted without Parliament keeping control over them. I see that the Leader of the House is present and I hope that he is having second thoughts about this exercise. [HON. MEMBERS: "Get on with it."] I hope that he is having second thoughts about this exercise. [HON. MEMBERS: get on with it."] I hope that he is carrying on an effective conversation with the Government Deputy Chief Whip. [Interruption.] It is no good hon. Members barking at me, although I know what the Prime Minister said about them. If I can peacefully interrupt the interesting conversation which the Leader of the House is having with the Government Deputy Chief Whip—

Mr. Edwin Wainwright: On a point of order. Would you interpret to the House, Mr. Grant-Ferris, what the hon. Gentleman is talking about? Is he speaking to the Amendment, or merely making remarks about hon. Members?

The Temporary Chairman (Mr. Grant-Ferris): I am the sole judge of whether anything is in order. As soon as it is out of order, I shall say so.

Mr. Peyton: I am obliged to you for your help, Mr. Grant-Ferris. I was endeavouring only to get a slight hearing as the peace of the Committee was being shattered by the loud conversation between the Leader of the House and the Deputy Chief Whip. [Interruption.] I am perfectly prepared to stand here for a long time and indefinitely to repeat an accurate account of what happened. If hon. Members ask me to do it again, I am quite willing to do so.—[HON. MEMBERS: "The right hon. Gentleman is going."]—I have been blamed for many things in my time but it would be grossly unfair if blame were laid on my blameless shoulders for getting rid of the Leader of the House.

The Minister of Defence for Equipment (Mr. Roy Mason): He was just showing contempt for nonsense.

Mr. Peyton: I cannot remember who the Minister is who is sitting on the Front Bench, but he specialises in interventions when sitting down, not having been here before them. If he wishes to stand up—

The Temporary Chairman: Order. I hope that the hon. Gentleman will come to the terms of the Amendment. When he comes to the terms of the Amendment, I hope that the rest of the Committee will listen in reasonable silence.

Mr. Peyton: I am obliged for your protection, Mr. Grant-Ferris, but I fail to see why I should be called to order when I have to put up with rude and impertinent interventions from the Treasury Bench, from Ministers who should wish to get the business and have


not the sense to keep their traps shut. [HON. MEMBERS: "Oh."] I am not in the least bothered. I am happy to listen to the kennel opposite yapping its way through the night.
If I may get back to the Amendment, it suggests that the £45 million proposed in the Clause is too large, at any rate initially, and should be reduced. We have already been at length over the ground and have suggested that we would rather not vote these excessively large sums of money for the National Coal Board in one move. This is not to say that the House would not be prepared to vote the sums required on a further report to the House by the Minister. It is for this purpose that I move the Amendment.
There is no great magic in the figure, but I do not think it unreasonable to ask the Ministers concerned with raising from the taxpayers, through Parliament, these very large sums, to come back to Parliament after a certain time and get the full amount they require. The spectacle of the party opposite supporting the Government who are in deep water today, while mocking the arguments of financial stringency and financial discipline makes me fear for the future of the country.

Sir Harmar Nicholls: There is a lot of merit in the principle behind my hon. Friend's argument. As he said, the figures do not mean anything, but the merit is this: it is quite clear from the speeches we have heard from the Minister and from the Parliamentary Secretary that the problems facing this industry are coming thick and fast and that they change the position. The situation the Ministry envisage one minute is completely changed the next minute. We had a good example explained by one of my hon. Friends on the last Amendment. If we can we should find some way of bringing the question of this vital industry before the House more often.
12 m.
I would have thought that my hon. Friend the Member for Yeovil (Mr. Peyton) would have had lots of support from hon. Gentlemen opposite on this. They have shown their concern, and I

congratulate them on the way that they have been able to marshal their forces and bring their points of view to the attention of the Treasury Bench over the last few months, and certainly over the last few weeks. It would have been a good thing not to have left it to the discretion of the Minister of Power, who, whilst he is able, has, of necessity, to protect his Department and the people who run it. Of course, the one way that he can protect his Department is by keeping its problems outside the House of Commons. If something can be kept within one's Department and not have to face the probes and examination once it is brought to the floor of the House—

Mr. Albert Roberts: The hon. Member should bear in mind that a National Coal Board Report has not been debated since 1961.

Sir Harmar Nicholls: All the more reason why we should learn from that. It has not been debated, and we have seen the result affecting this industry very badly. It has disturbed all of us, and nobody is more disturbed than those who represent mining constituencies.
Human nature being what it is, I know that the Minister will not want to neglect his job—and I do not think that the right hon. Gentleman will ever lack enthusiasm for wanting to do his job well—but there is all the difference in the world between the Treasury Bench and the back benches and there is all the difference in the world between the executive and Parliament. When the right hon. Gentleman is in charge of his Department he is doing his duty within the Department by trying to save embarrassment at having to give explanations half way through a particular exercise. The Department likes to keep it out of Parliament. It is a useful thing for any Department to be able to go for a good length of time doing what it thinks is right and doing the best it can without having to face a probe.
If there is one industry in the country which ought, over the next two or three years, to go through the perpetual Parliamentary examination to see that the direction taken is the right one, it is the coal industry. This is a serious point. If the Minister can find some way of implementing the principle that my hon. Friend has set out, without accepting the


figures which appear on the Order Paper, I am sure that he would be doing the right thing. But I say to hon. Gentlemen opposite that the Treasury Bench is as much their enemy as it is the enemy of the Opposition on this. The Departmental heads want to hide from its gaze, just as much as it does the Opposition, the problems which are facing them.

Mr. Swain: The hon. Gentleman says that the Treasury Bench is just as much the enemy of the back benches as the Opposition.

Sir Harmar Nicholls: I said "of the Opposition".

Mr. Swain: I can inform the hon. Gentleman that I would sooner trust any Member of the Government Front Bench than any Member on the benches opposite.

Sir Harmar Nicholls: There were 19 votes in the Lobby last night which did not reflect that point of view, but that was yesterday and I suppose that today is today. However, I make the point that the Treasury Bench is the enemy of the rest of Parliament, whether the Opposition or those sitting on the back benches on the Government side. In nine cases out of ten it does not matter, but every now and again we get a problem in an industry, such as the coal industry, where it is up to both sides to join together to see that we get a full and proper answer.
All that my hon. Friend has done in the Amendment is to give one suggestion showing how we can accomplish that. If we do not grant the Board the money that it thinks it might want over a long period it means that it will have to keep—[interruption]—if hon. Gentlemen opposite will keep their fingers on this Department and keep it short of money so that it has to keep coming back for more, they will make certain that their constituents' interests are properly looked after. It is because the Amendment would entail that happening that I am supporting my hon. Friend, but I would have expected more support from hon. Gentlemen opposite.

Mr. Hector Monro: I realise that the Amendment must be read in conjunction with the 1965 Act. I rise to speak on it because my principal objective in seeing that these Clauses are

passed is to ensure that miners in my constituency are retained in their present employment until new jobs are available for them.
I have had some difficulty in obtaining the facts. I had hoped that the Parliamentary Secretary would have been able to give details at the end of the Second Reading debate, or that we might have heard more since, either by letter, or in the debates today. Certainly the Minister gave some indication of the number of pits which would be closed in 1968. The closure of the 16 pits which was postponed by the Prime Minister from September to 31st December are the 16 which, under exceptional circumstances, could be kept open until 31st March. From the way that the Minister spoke this evening, it perhaps gave some indication that their closure could be postponed still further, and I would be pleased to know whether that is possible, because in the area of the colliery in which I am particularly interested—and this applies to most of the Scottish areas where closures are imminent—it is most unlikely that new jobs can be found by next spring.

Mr. Marsh: I think the hon. Gentleman will find that he is on Clause 4, and not Clause 2.

Mr. Monro: I accept that there is a great intermingling of the various Clauses. The money to which I am referring is relevant to the grants which can be used in respect of pit closures. I therefore think that the information which I am seeking has a bearing on this, and I hope that the right hon. Gentleman will be able to provide it before we pass this Clause.
I am speaking against my hon. Friend the Member for Yeovil (Mr. Peyton) because I think that under the exceptional circumstances of the moment, with high unemployment in the mining areas, the money which is suggested in this Clause will be necessary. This is why I support the Clause.

Mr. Peyton: My hon. Friend has misunderstood the point that I was trying to make. I hope that he will apply his mind to it. I am not denying that money is necessary. Nor am I saying that it will not eventually be spent. I am saying that the House of Commons should maintain some control over the N.C.B., in


which my confidence, to put it politely, is limited.

Mr. Monro: I thank my hon. Friend for that further explanation. I have listened to his earlier speeches, and I support him in what he said about the borrowing powers. From what he said, I take it that he is extremely critical of the Board, and so am I on certain measures, but, on the question of colliery closures, I think that the recommendation put forward by the Government will be valuable.

Mr. Freeson: I hope that it will not be taken as discourtesy if I do not seek to answer the point made by the hon. Member for Dumfries (Mr. Monro), because he was not really speaking to the Amendment before us, or the Clause to which it refers.
As we are challenged to recapitulate the position of the finances referred to in the Clause, I shall be only too glad to go over the background and set out the position. Before doing so, perhaps I should say, as much stress has been placed on the need for this House to maintain a check on the finances of the Board and its activities generally, that this year. with the debate in July, the Second Reading debate, and tonight's Committee proceedings, we are paying more attention to the financial and other aspects of the Board than has been the case, I imagine, for the preceding five years put together, including the years when the previous Administration was in charge.
I do not think it can be said accurately that we are not paying attention to Parliamentary control or concern for the affairs of the industry, but the position we are in tonight with this particular part of the Bill is, as was stated at one point by the hon. Member for Dumfries when he was speaking to the Amendment, that it follows on from the position under the 1965 Act.
In July of this year, in the debate to which I have referred, the Minister undertook to review some of the present benefits payable by the N.C.B. which rank for Government grant under the 1965 Act, and to do so in the light of the estimates of the numbers of men leaving the industry or transferring to new jobs within the industry.
At that time he explained that the benefits were important, and they remain important, to ease the obstacles to payment which has to be made in this situation of the industry, and to reduce these obstacles to a minimum.
The existing arrangement is one which should be accepted by all good employers with any sense of social obligation, and certainly the N.C.B. has been acting in that spirit over the years. It takes into account also the economic position of the industry and it is something which we have to review because of the changing position which has been the subject of much debate inside and outside the House of Commons in recent months.
Under the 1965 Act, the N.C.B. paid £3·8 million of expenditure each year, and half of the remainder. The estimate of the total cost of these grants for the five years to 1971 was expected to be about £80 million at that time, and the total Government contribution was to be limited to £30 million. Expenses ranking for grants from the Exchequer covered three broad headings: payments to ease the problems of transferring men within the industry; payments for social welfare activities; and payments to redundant men.
The numbers transferring within the industry, although reducing, will, however, require an increased scale of benefits being paid for by the industry, or would have were it not for the Bill, owing to the greater distances over which the miners have had to travel in order to take up employment to which they are transferred.
The cost of the new supplementary income benefit for mine workers will be carried under the proposals in the Bill by the Treasury, and the cost of reimbursing the Coal Board's superannuation funds for premature pensions will also be so carried. But the redundancy payments will fall to be met by the N.C.B., and the increased numbers of salaried employees of the Board becoming redundant still impose a substantial burden.
The estimate of the total cost of benefits still to be paid over the remaining four years up to 1971 will be about £70 million. The Government, taking into account the financial position of the Board, has therefore decided it would be right for the Treasury to bear two-thirds


of the cost to the Board for each of these four years up to the limit of £45 million.
The effect will be to transfer £5 million a year of the cost to the Exchequer, together with the total cost of supplementary benefits for elderly miners aged 55 and upwards which will approximate to £11,500,000 net during this period over the next four years.
There is, too, the industrial as well as the social aspect. Not only is this desirable socially, but the industry will benefit from concentration of production and the transfer of skilled men to more productive jobs. The main point in our minds in these debates is that the community must accept a social obligation to help the large force of men affected by the changes in the industry, about which we are concerned in these debates.

12.15 a m.

Mr. Nicholas Ridley: It will be more opportune to discuss the grants themselves on the next Amendment, which seeks to transfer more of the responsibility for the grants to the Exchequer. I will reserve my remarks on the grants themselves to that occasion.
I support my hon. Friend's attempt to ensure that the Government will come back to the House earlier to find further monies on all these grants and loans. The Minister seems to take the arrogant attitude that Parliament is a last formality after they have made up their minds. Evidence of this is the Supplementary Estimate published last week asking for £3,968,000 more in respect of the £45 million grant in the Bill.
I submit that Supplementary Estimates should not be put in for sums deriving from Bills which the House has not passed. The assumption is made in this Estimate that we shall agree to this £45 million and a further similar amount in another Clause, plus other moneys in other Clauses, as if it were a foregone conclusion that the House would not alter the grants. It is only tactful to wait until the House has passed the legislation before claiming the money in this form.
The grants in Clause 2 are about the only ores which Mr. Pierre-Paul Schweitzer would approve. He will not consent to most of the latter ones. I believe, when the Chancellor writes to

him, as he will have to do, to ask his permission to pay them.
I suggest to my hon. Friend, therefore, that we let this £45 million go through and discuss its merits on the next Amendment, because this series of grants is to be commended. I reinforce his plea, however, that, with an industry in serious trouble like the coal industry, the Government should come back to the House regularly with progress reports and requests for further sums so that the House can judge the progress of the industry.

Mr. Peyton: With my usual humility, I will take my hon. Friend's advice and ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Peyton: I beg to move Amendment No. 10, in page 2, line 11, leave out from `date' to end of line 16.

The Temporary Chairman (Mr. Grant-Ferris): I understand that it would be convenient to discuss with this Amendment, Amendments No. 48, in page 2, line 10, leave out '1971' and insert '1972'; No. 49, in page 2, line 11, leave out 'four' and insert 'five'; and No. 11, in page 2, line 15, leave out 'two thirds of'.

Mr. Peyton: This Amendment echoes the sentiments we have expressed throughout our debates on the Bill. It seeks to require the N.C.B. to contribute half the expense and leave the other half to the Exchequer, instead of following the course proposed by the Bill of making the Exchequer provide two thirds of the amount. I will not labour the argument at this hour because I have already sufficiently adduced my case about how I feel convinced that I can have no confidence in the Board's capacity to control its expenditure properly. When dealing not with one's own money but with money which has come straight out of the Exchequer it is tempting to lose control of expenditure.

Mr. Ogden: Amendments Nos. 48 and 49 in my name are linked with the one moved by the hon. Member for Yeovil (Mr. Peyton) and I draw my right hon. Friend's attention to my proposals. Under the Bill as drafted—if none of these Amendments is accepted—a total


of £45 million will be available for a period of four years. I propose that the sum should remain the same but that the period should be extended to five years. Thus, the £45 million would remain unchanged and only the period would be increased.
The Minister has often quoted from the Blue Paper on fuel policy, Cmnd. 3438. It is interesting to note that paragraph 6 states:
The Government's aim has been to lay down long-term policy guidelines which can be modified and adjusted in response to new developments and to provide a coherent framework within which specific decisions can be taken as the need for them arises. Within this context, future decisions need to be based on up-to-date information; there will be periodical revisions of the relevant economic analyses and estimates in the light of changing circumstances; and the Government will keep policy under continuing review. Thus, if present forecasts prove wrong—as in some respects they certainly will—there is scope for adjustment from year to year.
Hon. Members have referred to the fallacy of previous forecasts and the difficulty of forecasting. It would be wise and prudent, instead of limiting this sum to be made available for only four years—and one hopes that there will be a residual sum—to state, without increasing the total sum available, that if there is anything left over at the end of the four years, it may be made available for the fifth year for contingency planning. I hope that my right hon. Friend will indicate that he will consider this either here or in another place.

Mr. Marsh: The problem which arises here is an understandable one for we are drawing what must inevitably be an arbitrary figure for the contribution from the Exchequer as opposed to that from the Board. First of all, there is a strong feeling that the provisions under the 1965 Act were too onerous so far as the Board is concerned, and that view is held, not only by the Board, but by the union as well.
It is with all modesty that I say I must perhaps be the only Minister in the House who can expect to have opposition from both sides at one and the same time, and tonight provides no exception. From one side—or, rather, from both sides—I am told that the Exchequer contribution is too high, and at the same time I am told that it is too low; so

I think that, perhaps, the figure we are suggesting is about right. Yet I think that the Committee will agree that there is no amount which anybody can produce before us and say, "This is the right figure". It is right that the Board should carry a proportion of the burden; it is good for the morale of the industry that it should not feel it is living on the Exchequer, and it is right from the point of view of ordinary commercial practice. The industry will benefit from the concentration of production and the transfer of men to more productive jobs within the industry, and it is this which provides part of the cost.
That is so far as the industry is concerned. The community will benefit in that it has also an obligation to meet part of the cost, and the first consideration is that the £3·8 million bloc—the Board has to pay that—is a quite unrealistic figure. Amounts of that order, which cannot be met, are better if they are squarely faced and the first point is to abandon the first £3·8 million.
Under the 1965 Act, the Board has to meet pound for pound of the Exchequer contribution after the first £3·8 million and, again, I cannot produce any absolutely right proportion. It is a matter of judgment but, personally, I think that the pound for pound formula was unrealistic and unreasonable. However, as I have said, there is much to be said for the Board carrying some of the burden. So, we have changed this to a one-third contribution instead of one-half and, as a result, it is estimated that the difference between now and 1971 will be about £11,250,000. I do not underestimate the size of that figure, but, in the context of the size of the exercise which is going on, this is not an unreasonable increase in the Exchequer's contribution either from the economic standpoint or from the point of view of the social reasons to which I have referred.
My hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) made the point quite clearly that it might be reasonable to extend the period from 1971 to 1972. I would say to him that, here again, this is inevitably an arbitrary decision, but what we have done all the time since the exercise first started after the passing of the 1965 Act is to work with 1971 in mind. That is three years ahead


and, so far as anybody can say, that is as far as we can see. On many occasions we shall have to look at what is happening in fact. Much comment has been made about the need to debate this industry, but I should have thought that in the last year we have debated it more than in the previous four years. That is right, because it is important, and there will be many other debates between now and 1971. I hear the hon. Lady the Member for Finchley (Mrs. Thatcher) say "More money". That may or may not be the case. I have a feeling that we will be discussing the coal industry again before 1971, and I put it no higher than that.
I therefor suggest to my hon. Friends and to hon. Members opposite that this is a question of balance in the light of the size of the problem which the industry faces. I cannot prove that two-thirds is the right figure, I cannot prove that 1971 is better than 1972, but what the Bill sees to do is to draw a new balance which gives the Board a chance of meeting its obligations, and places a bigger load on the Treasury—at considerable cost—and enables us to keep our eyes fixed on 1971 in the knowledge that as we get into 1968, and again in 1969, the picture will be changing all the time. All the way along we are trying to give the industry a period in which to see how far it can get—and it is a big increase and will be more—and how far it will be able to press on along these lines. With those remarks, Mr. Grant-Ferris, I ask hon. Members if they would now be prepared to accept the Bill as it stands in this context.

12.30 a.m.

Mr. Richard Kelley: We want the Minister to look at our Amendment on the ground that as in 1965 it was recognised by the then Minister that the Treasury had some obligation to meet the cost of the transference of men and of the contraction of the industry, so, as the contraction is now likely to be accelerated and much more severe, the Treasury should be prepared to accept the full responsibility. We want to leave out the words "two thirds of".
Unless the Board is allowed to concentrate production on the most efficient units we shall never have the kind of industry of which the Minister has often

talked as making a strong and vital contribution to our energy requirements. In order to carry out this exercise in concentration the Board must meet an ever-increasing burden. There have been occasions when men have moved from one pit to another, where they have had only a few months of work there before having to move on again. Only on Saturday a man came to see me who had already moved four times—three times in Scotland and once down into England—and now works at a pit that is at risk. If such movement of labour has to be undertaken by the industry on the present basis, even though it appears to be much more generous than the 1965 arrangement, there will be a burden which it should not be asked to bear, and one which no other industry has to bear on such a scale.
The Minister ought to consider the burdens peculiar to the industry. It has to meet, for instance, the enormous cost of compensation for subsidence. It has to pay out about £20 million a year in common law damages for injuries received in the pit, where the incidence of accidents is considerably greater than it is in any other industry. Management and men have to be able to accept the full spirit of the safety regulations. That is much more difficult in a mine than in the ordinary type of factory or in other places of work, so claims for personal injury are greater in coal mining than elsewhere. Large housing estates have to be subsidised so that rents charged may be comparable to those prevailing for similar houses in the area.
These things are peculiar to the mining industry. Unless it is prepared to meet this burden, the State will not have the viable industry envisaged by the Minister. We shall lose men, and miners cannot be made overnight. We cannot send a man to an accelerated training course and expect him to be turned out as a fully-fledged miner in a short time. When we lose these men they seldom return to the industry.
A vital force in our economic life is formed by those able to man the pits and produce coal. We should do what we can to enable the industry to move these men to areas where work is available so that the force necessary to keep the industry going can be maintained.

Mr. Clifford Williams: With my colleagues I have listened to the debate and we have been entertained a great deal. Some of the speeches have been completely out of context. They have ranged over a wide field. I perhaps will do the same. If so, I ask your forgiveness in advance, Mr. Grant-Ferris. We have had Worcestershire sauce, Somerset cider, harmless gas and, from the hon. Lady on the Opposition Front Bench, a sip of champagne.
I do not pretend to understand all the implications of the arrangements which have been made. I worked in the pit for only 45 years and I have several brothers who worked in the pits for many years. We lived and worked in a period from 1918 onwards, the memory of which will remain with us always. When I hear hon. Members opposite professing friendship for the miners it is not in human nature to accept it. When one has lived in the valleys and seen the suffering and stark tragedy which can never be removed, one thinks of the gas chambers which Hitler had in Germany. I asked your guidance, Mr. Grant-Ferris, lest I should stray off the road.
Perhaps hon. Members opposite do not know when the Ridley Committee's Report came out.

Mr. Ridley: indicated assent.

Mr. Williams: There is one scholar in the class. At the time of that Report, 90 per cent. of the energy of the country was produced from coal. Today it is 65 per cent. That has been a violent change and it appears to be accelerating as technology advances. The Ridley Committee, only 15 years ago when the country was desperately short of fuel under a Conservative Government, was set up by a Conservative Government. It advised on
possible measures to promote the best use of the country's fuel and power resources … To meet in full the demands of the community for the different fuel and power services … To provide for export fuels …
Export fuels mark you, 15 years ago. Today that seems rather strange. The Committee proposed producing 222 million tons of coal in 1955, and said that that figure should be increased to 250 tons a year by 1970. The experts on the opposite side of the Committee have

told us how wrong the Coal Board has been in its forecasts, but there was a case of a specialist committee set up by a Conservative Government being hopelessly wrong.
Changes affect our mining communities and the lives of all those in them. Some places, like the Rhondda, have become economic graveyards. We had that under the coal owners, and I worked under them for a long period. My God, if ever we worked under slave masters and brutality, then I and my colleagues experienced that for 30 years. I shall never criticise the Coal Board or the Government that nationalised coal. Whatever the Board's defects, it has been very good, and those old days must not be repeated.
Eminent people have stated many times on wider economic matters that the world does not owe us a living. We accept that, but we must also accept that the country owes the miners a living. What they have given over the years cannot be measured in pounds, shillings and pence. During the last war and for a decade after, the demand for coal was insatiable. Every pit capable of production was needed, and we were exhorted to produce the maximum amount possible.

The Temporary Chairman: Order. I am sorry to interrupt the hon. Gentleman. I know that he feels these things very much, and we are all very interested to hear him. But I am bound to keep to the rules of order. All the Amendments refer to one thing only—pit closures—and we must adhere to that, for otherwise there will be no end to the debate.

Mr. Williams: Thank you, Mr. Grant-Ferris. I asked you to guide me. I shall have to skip half a dozen pages of my notes. You have knocked me off my stride, though you did not mean to do that. I thought that I was on the mountain then, practising to myself. I do not want to take advantage of the Committee.
Do not ask me or my colleagues who worked under both systems to deride or belittle the National Coal Board. We know that the country and the Government can never hope to repay what the miners have given the nation.
The most shameful thing I have seen in my life was a picture in the London Evening Standard of 21st November when the country was up against it and the Government were compelled to devalue. It portrays the parasitical non-producers on the floor of the Stock Exchange the day after devaluation.

The Temporary Chairman: Order. I cannot have that either. The hon. Gentleman must keep to the Amendments, and remember that they bear on pit closures.

Mr. Williams: I had to bring that in as a contrast to what I was saying. We believe in the Amendments which we have put down and we believe that we have the support of the Committee and the country.

12.45a.m.

Mr. G. Elfed Davies: I will not detain the Committee for long but I want to make one or two comments and refer to what the Minister said when he spoke about there being arguments at all times. He said that hon. Members opposite said that the amount borne by the Treasury was too high while we said that it was too low. The problem is that it is too little and too late. Had much more been done in 1965 many of the problems which we face today would probably not be there.
The real question was not whether the figure was too high or too low. The Minister suggested that the right path was in the middle. But it is too little and rather too late.
The 1965 Act assumed that the cost of the concentration of the industry—and that included only expenditure to facilitate the redeployment of miners—would be something like £80 million. I am convinced, as I said on Second Reading, that the concentration of the industry since 1965 has been mainly Government policy. If an industry is contracted by the policy of the Government, surely it is right to argue that the Government should accept full responsibility. That is why we lave put down this Amendment. We believe that, having taken decisions as a Government, it is the responsibility of the Government to meet the results of those decisions. Therefore, I suggest to the Minister that he should say, not as the Opposition suggest, that the figure

is too high, but as we suggest, that it is too low. Because this balances the scales he cannot wriggle out of the middle and say that his figure is right.
He should face the facts and the facts are that the Government have decided a policy and there is a responsibility on the Government to meet it. The Amendment simply asks the Government to meet the full responsibility of the results of the concentration policy. That is why I support it.

Mr. Marsh: I do not want to prolong the debate because I know that hon. Members on both sides want to move on. This is a long Bill and there are a number of other points to be made.
My hon. Friend the Member for Rhondda, East (Mr. G. Elfed Davies) has put his finger on the most sensitive point: whether the Exchequer should carry the entire cost of this exercise. This is a perfectly reasonable and legitimate point to put forward, but I think it would be a mistake. It would mean that the Coal Board would be dependent on the Exchequer for the whole of its expenditure under the Bill. While the expression "He who pays the piper calls the tune" is a cliché, there is a tendency to undervalue most clichés. It is important for the Board, in its own interests, to have a smaller proportion to bear, but a proportion which enables it to put its point of view forcefully and argue its share in the exercise.
I do not think my hon. Friend and I find ourselves in disagreement in principle, although we will probably have more arguments on the issue, but I hope that he will feel, on reflection, that it is important for the Board to have a degree of independence from the central Government.
The Board's share is much smaller because of the abolition of the first £3·8 million as well as the change from one-half to one-third. The remaining third gives the Board a level of independence which is valuable to it. It enables it to take a close interest because of its financial commitment to those concerned.

Mr. Ridley: I have great sympathy with the case put by hon. Members opposite. The total sum involved was thought last year by Lord Robens to be £80 million in this operation. In his


evidence to the Select Committee he said that the Board would have to find £50 million and that the Government would only find £30 million. The Parliamentary Secretary, a year or so later, says that the figure is now down to £70 million, of which £25 million is for the Board and £45 million for the Government, making a switch of £25 million in favour of the Board.
This seems to me the best way to help compared with many of the ways available. What is now proposed by hon. Members opposite is that there should be a further switch of this last £25 million from the Board to the Government. This scheme is very important. The Board tells me that, in the first four years of this exercise, 10,500 men have been taken from declining coal fields and also from other industries and put to work in profitable coal fields in the Midlands and elsewhere. This, as far as I can make out, has cost approximately £15 million, an average of £1,500 per miner.
For the next four years, as outlined in the Clause, the estimated cost is a further £70 million, and the Board, according to my information is hopeful of persuading another 20,000 miners to accept resettlement of this sort, which works out at £3,500 for each miner resettled. I am not sure whether that figure is right. It seems we are not getting particularly good value for money if the cost has gone up from £1,500 to £3,500 per miner resettled.
I have also checked with the cost of similar schemes on the Continent by the Coal and Steel Community. In the last complete year, 1966–67, I find that 51,000 miners were moved and resettled at a cost of nearly 14 million dollars, which works out at about £100 each. So we have this very wide range between £100 in Europe and £3,500 as forecast for here. There is, of course, a very large benefit in doing this but Lord Robens—

Mr. Swain: The discrepancy between the two costs is accounted for by the Board including the provision of houses in the new areas where the miners are resettled. This does not happen in America.

Mr. Ridley: I was not talking about America but about the European Coal

and Steel Community. The figure for housing is relatively small. It has only been £2.2 million so far in subsidies by the Board. I do not think that that aspect can account for so large a gap. How much are we spending per head? How much do we plan to spend? It is important to know the cost and what we are getting for our money, although, of course, the scheme is desirable.
As I was saying, Lord Robens has said that it has a large financial advantage for the Board. In his evidence to the Select Committee he said:
I could put the figure in another way which may be of interest, that is the miner transferring from Northumberland to East Midlands earns for the Board £1,000 a year, and he earns a considerable amount of money for himself.
The Board itself, in its hand-out on the scheme, stated—and this is significant:
It costs us over £1,000 to train an underground face worker but only about £500 to move a man. Is our redeployment effort worth while? We think it is, because it enables us not only to fulfil our obligations as a good employer but to make a sizeable contribution to our balance sheet. The marginal contribution of a man at profitable pits in the East Midlands can be as high as £5,000 per man year. There can, therefore, be no more effective use for our marginal labour than to redeploy it; our efforts are bent on doing so as effectively as possible.
I am sure that that is true. Therefore, in this expenditure there can be very large economic benefits for the Board in carrying it out. One has to ask why it is proposed that the Government should help.
Another point which seems to me to be important is that the Ministry of Labour pays similar grants to workers in other industries. We know what the grants are—travelling allowances, make up of lost wages, settling in costs, lodging allowance, household removal, continuing liability in the place where a man comes from, household resettlement grants and increased rent allowances.
The Ministry of Labour has a rudimentary scheme for other workers than miners. The comparison seems extraordinary. The Ministry of Labour last year, on schemes for non-mineworkers—the whole of the remainder of the population apart from mineworkers—spent £366,000 only, and here it is proposed to undertake expenditure rising to perhaps £20 million on mineworkers.


There is this enormous discrepancy between the arrangements provided for the population as a whole, £366,000 a year, and the arrangements for the mineworkers.
Looking back over the events since 20th July last year, when the great drive for redeployment started—and we must admit that it has been a total failure—one sees the reason, because it is clear that to achieve successful industrial redeployment an expenditure of £366,000 a year is totally inadequate and that the example of the Coal Board in having at least tried to tackle the tasks involved is one which could be emulated by the Government as a whole.
That consideration leads me to believe that this is a national responsibility. For instance, of the 10,500 miners so far redeployed to profitable pits, 2,000 were unemployed or not previously employed by the Board at all. We thus have a transfer of men from other industries into coal mining. Obviously, this is extremely valuable both to the Board and to the economy as a whole.
It would seem to me that the policy in this direction should be national and should concert transfers from one area or industry to another—indeed, from one firm to another. It is not right to charge employers contributions on the weekly stamp for industrial movement of that sort—unemployment pay, training and the like—and, at the same time, to put the burden on to the employer, even in part, as is being done in this case.
The best way that we can spend money to help the coal industry is on grants to help it to become efficient and effective. This means redeploying men from pits which are closing to the pits which are short of labour and have a great future in other parts of the country. Therefore, I would have thought that, on all this argument, hon. Gentleman opposite who have put down the Amendment to remove the two-thirds limit on the grants have the better of it, though I must be quite honest and say that I believe that some of the later Clauses of the Bill seeking to spend a lot of money on far less worthy objects is the place where we should I make the economies to find the extra money which would be involved in making this transfer. But I would find it very difficult, if this matter

were to be taken to a conclusion, to say other than that it is the right place to spend Government money, and I only wish schemes of this sort were available to workers in every industry, and not reserved to coal miners.

1.0 a.m.

Mr. Eadie: I want to comment, briefly I hope, on this part of the Bill's provisions. I sought, with some of my hon. Friends, to put down Amendments to those relating to pit closures. I do not want to go over the ground which has been already covered by some of my hon. Friends with, let me say, a great deal of compassion, sincerity and knowledge.
I take the view—and I think the Minister knows it—that the Government have to share the responsibility for the social consequences of pit closures, because, although I know that it is arguable, it is my submission that it is Government policy which is responsible for the concentration in the industry. Government can influence consumer demand, and if there is a lack of consumer demand for coal there will be pit closures. Some of my hon. Friends have sought to argue that the Government should be responsible for the social consequences in their entirety, and, quite frankly, I think that that is a reasonable proposition.
When we start to talk about pit closures and the costs and social consequences it is assumed, particularly by hon. Gentlemen opposite, that the pits in the areas of closures are derelict. This is not entirely true. In many of the areas where we have pit closures and serious social consequences there has been a big capital investment, a capital investment in houses and schools, in clinics and roads. Even when the pits are closed, a necessary economic and social infrastructure is still there in the area, and I would argue, if there is contraction of employment, that the cost of putting in the infrastructure is a rate burden on the people in the area.
In my submission, the Government have a responsibility for carrying out their obligations in this, because, after all—and I know this is contentious, and that hon. Gentlemen opposite, and even some of my hon. Friends, do not agree with me about it—unproven technology is taking the place of proven technology.


Let me take an example. In the area in which I reside—not my constituency—a commercial decision has been taken, I understand, on the closure of the Michael Colliery; but there are reserves of coal there; there is an abundance of coal; it is a very very rich field of coal. Because of the policy of the Government for concentration, the argument is being advanced that the coal will not be needed, and, therefore, we will not work it in that area. Because they have been politically conscious and sensible, the miners of the area have elected Labour-controlled authorities which have ploughed back this vast social capital in houses, schools, roads and clinics. The Government have a responsibility not to carry out this policy of concentration and neglect this social capital, this rate burden, this capital burden, in areas where there are pit closures. The Government cannot abdicate the responsibility of backing up these authorities financially.
I therefore ask my right hon. Friend to realise that what we are asking is that the Government should take the entire responsibility for the social consequences of pit closures, and our arguments are soundly based. Many of my hon. Friends endorse these arguments and I hope that my right hon. Friend will give them careful consideration.

Mr. Edward M. Taylor: I should like to put a short question of fact which arises out of the argument put so eloquently by the hon. Member for Midlothian (Mr. Eadie). He referred to the Michael Colliery which is representative of many Scottish pits which are closed, or about to be closed. Is the contribution to be made by the Board, and which is now to be one-third instead of one-half, to be borne by the divisions or by the Board as a whole? If it is borne by the divisions, that will clearly have the effect of raising the price of coal in each division affected.

Mr. Marsh: I apologise for intervening for a third time on this subject, but this is an important issue and it arouses strong feelings among many of my hon. Friends and some hon. Members opposite. I can tell the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) at once that there is no question but that this provision is met by the

Board on a national basis. It is right that it should be.
The whole argument has been that this is a cost which must fall on the State. We have moved away from the 1965 Act, when the Board was asked to pay the first £3·8 million and a pound per pound thereafter, to a position which is considerably better and in which the Exchequer does not put a block at £3·8 million and where the Exchequer meets two-thirds of the amount. We are down to a very narrow argument about whether the Board should be relieved of the whole lot.
I ask my hon. Friend to consider very carefully what this would entail. As long as the Board makes even a minimum contribution, it is master in its own house, which would not be the case if the entire financial burden were to be placed on the Treasury, thus making the Board 100 per cent. dependent on the Treasury for this provision. I say that with the greatest respect—which all Ministers always have—to the Treasury. I am sure that on reflection my hon. Friends will see that that would not achieve their objective, in which I support them.
I do not make a quibbling argument, but it is a fact that leaving out two-thirds and charging the full amount of the Board's expenditure against the Bill's provisions would exhaust these financial provisions faster than would otherwise be the case.

Mr. Ridley: The right hon. Gentleman should admit in fairness to his hon. Friends that they have proposed to increase the amount provided, so their argument holds water on technical grounds.

Mr. Marsh: I said that I was not making a debating point. I was saying that, given the drafting peculiarities of Bills and the fact that the Financial Resolution has been passed, the effect of the Amendment would be to charge the full amount of the Board's expenditure against the financial provisions of the Bill. The effect of that would be to exhaust the financial provisions of the Bill faster than would otherwise be the case unless expenditure were less than was previously thought. Therefore, taking these arguments into account, and they are powerful— —

Mr. G. Elfed Davies: What I think my right hon. Friend should realise is that some other provisions in the Bill may be over-generous, like the provision for people who may transfer from one coal field to another. Some coal fields which are contracting are not taking these men in, so there may be financial provision there which counter-balances this.

Mr. Marsh: This is an understandable reaction, but I hope that it will not spread, because the undermanning of economic pits would be one of the most dangerous things for the industry.
We have done a great deal of calculation, and in these circumstances, with the assurances I have given, and with the difficulties we face, I hope the Committee will feel able to accept the Bill as it is.

Amendment negatived.

Clause ordered to stand part of the Bill.

Clause 3

(PAYMENTS TO REDUNDANT WORKERS IN THE COAL INDUSTRY.)

Mr. Edwin Wainwright: I beg to move Amendment No. 13, in page 2, line 25, leave out from 'time' to end of line 26 and insert 'after 17th July 1967'.
Mr. Irving, with your permission, I think that we are debating with this Amendments Nos. 50, 51, 15, 25 and 27:
In page 2, line 25, leave out '17th July 1967' and insert '20th July 1966'.
In page 2, line 26, leave out '1971' and insert '1972'.
In Clause 5, page 3, line 24, leave out 'not later than 27th March 1971'.
In Clause 6, page 4, line 6, leave out 'between' and insert 'after'.
In page 4, line 7, leave out 'and 1st April 1971'.
It is not a question of "17th July 1967" being the commencement for redundancy payments, but of the termination of payments, according to the Bill, of 28th March 1971. There are Amendments among those which I have mentioned which would probably give far greater benefits to the men who become redundant and I hope that my hon. Friends will take part in the debate and will raise points on those Amendments which are far superior to the one I am moving.
The termination date of 28th March, 1971 may have some impact at present in the industry, where men can see coal stocks rising and think that after the date I have mentioned there may be no further redundancy payments and may decide to leave the industry because their morale at present is not too high. We should do all we can to ensure that men in the industry at present become confident that there is a future for them in it. It is essential for them that the Government should accept and provide for redundancy payments to continue beyond 28th March, 1971.
There is also the question of men already declared redundant. I think that the Government should consider what can be done for these men who are still out of work. Many of them will be those who have given their lives to the industry and who are suffering from ill health, but are not so incapable as to have to sign on at employment exchanges. These are men who have suffered serious accident and who still could be employed in some industries, and because they cannot be registered as sick, sign on at the employment exchanges and feel left out in the cold. The Government should give consideration to these men, and I hope that the Bill can be improved to take them into account.
1.15 a.m.
On the humane side, the Minister said that if we increase the efficiency of the coalmining industry—and I hope that we shall continue to do so—because of more productivity per man employed there is a great danger of about 100,000 becoming redundant. I would sooner a man become redundant because of increased efficiency than because we are inefficient and fail to sell the coal. No matter how they become redundant, we must look after them better than we have done in the past.
At this juncture I think that the Minister should give serious thought to whether we are to become efficient and increase our stocks of coal and throw men out of work. There must be a strong argument for getting rid of the stocks of coal and ensuring that the men can continue in work as the mines become more efficient and allow phasing out by way of what is termed "natural wastage" to reduce the number of men employed.
If we cannot find employment for these men inside the mining industry, it is essential that new jobs are brought into the mining districts. If the Government's policy is to make certain that more coal is not consumed—but I hope that the Minister will ensure that coal will be consumed in greater quantities—and they brought new factories and plants into the mining areas, they would attract men from the industry, which is becoming more efficient, into the new jobs and so reduce the output of coal. If that is to happen—and I am afraid that it may be so—it is essential that we look after every person who becomes redundant and make certain that the men will not be afraid of becoming redundant after the year 1971.
It will be appreciated that men in the mining industry today are looking somewhat askance at what is happening about the future of the mining industry. They can see the stocks rising. They can see that they are becoming more efficient and, as they become more efficient, it will be more difficult for the increased coal stocks to be sold. Therefore, their morale will become lower and lower. If that is so, then the date that we have fixed in this Bill for the termination of the redundancy scheme ought to be deleted. I am not saying that it is the Government's intention that, at the 28th March, 1971, this scheme will be obliterated or removed and that there will be no further redundancy payments made—I hope it is not anyhow—but the men will give their own interpretation to the Bill when it becomes an Act and will probably say, "That is it. They are looking after us in this temporary period of four years, but after that there will be no redundancy payments made."
If that is so, many will leave the industry and seek pastures new, and the morale of the men remaining in the industry will get lower and lower. The Government should do whatever they can to improve their morale. Therefore, although the Amendment proposes to insert 17th July, 1967 I hope that my right hon. Friend will consider the men who are redundant now, and will ensure that the termination date of 28th March, 1971 is deleted.

Mr. George Younger: I hope that the Minister will give sympathetic

consideration to the Amendment, at least to its intention, if not to its detail. When I first saw the Clause it struck me as reasonable to have a terminal date for a scheme of this sort, but, having thought about it further, and having listened to what has been said tonight, it seems to me that there is no object or advantage to be gained by having such a terminal date.
If this date had some significance in the programme that we can see stretching ahead of changes in the industry, I would be prepared to listen to the argument that there was a logical terminal date which made sense in terms of what we expect to happen, but I do not think that, with the best will in the world, anyone is able to say that 28th March, 1971, has any particular relevance to any part of the programme that we can see at the moment.
It therefore seems that the date is almost bound to be too soon, or too late, or to have no particular meaning when it arrives. It will be arbitrary, not because of any deficiency in those who have chosen it, but because at this stage it is imposible to give any logical reason for it. If we accept this, it seems open to question whether there is any advantage in having a terminal date at all.
After all, the details of the scheme can be altered or revoked at any time by laying a further Statutory Instrument before the House. When such a Measure is introduced it can be debated, and we can decide whether such alterations are good or bad, or should be revised, or be put into effect, or whatever may be the case. Under the Bill, the Government have power to make such alterations as may from time to time appear necessary. In the light of the uncertainties and difficulties we can see ahead of us, it may be found convenient to alter the provisions of the Bill, to make them more or less generous, or to terminate them. I ask the right hon. Gentleman to listen very sympathetically to this argument. I do not think that the Amendment will spoil the Bill in any way. I think that it will leave the Government with complete flexibility to alter the scheme as and when the circumstances become clear.
Given that the intention behind the Amendment is accepted, even if the wording of it is not perfect. I think that the


Minister should consider it, and then bring it back at a later stage, drafted as he would like to see it. This is one way in which we can remove any possible uncertainty, which the hon. Member for Dearne Valley (Mr. Edwin Wainwright) said could arise. I do not think it will, but, as we approach 1971, human nature being what it is, people will become uncertain about what they should do to get the advantage of the scheme before the terminal date.
The Amendment has merit, and I hope that the right hon. Gentleman will accept it.

Mr. Robert Woof: I wish to confine my remarks to Amendment No. 27. The earnest purpose of this Amendment is to try to retrieve some lost confidence in the coal industry. Whoever desires to look at the endemic effects of the Clause after 1st April, 1971, will probably see that it gives every hope for all sources of energy except coal. For the coal industry it offers a diagnosis that must bring a haunting sense of some graphical meaning. It is an unmistakeable imprint of the elimination of large sections of the coal industry. What the industry faces after 1st April, 1971, is redundancy on a massive scale, and that is the specific reason for introducing this Amendment.
I feel that it would be impossible to remain altogether unconscious of the character and dimensions of the vast process of change. Of course we accept that the purpose of the Clause is to give some relief to support the cost of additional coal to be used by the gas and electricity industries.
My right hon. Friend the Minister has already stressed that the object is to try and hold demand for coal by 1970 at around 155 million tons. As we understand the position, the target of 155 million tons prospect for coal was formulated through a sense of perception that arose out of the Selsdon Park conference with my right hon. Friend the Minister of Power, along with the heads of the nationalised industries. Further to that, the Government accepted the advice of the N.C.B. that the rapid rundown in the period to 1970 would cause unmanageable difficulties for the industry.
Therefore, to a certain degree, the target of 155 million tons was accepted

if practical and necessary. To our way of thinking the thought operating in the Clause rests on the promise that in due course, when the time arrives, that is, after 1st April, 1971, when the brakes will be released against the holding operation, the rundown in the coal industry will be at a catastrophic speed onwards, and redundancy will be overwhelming.
The bearing of the fact, and its psychological import is of an inescapable dilemma. It has created widespread public controversy. It is, therefore, desirable at this point to get as firm a grasp as possible of what is involved.
Many of us believe that the proposal to end the support for coal to the gas and electricity industries on 1st April, 1971 does not go far enough to cushion foreseeable redundancy. That is another reason why we have sought to introduce the Amendment.
We accept that the Clause is not some fanciful imagination but an attempt to hold production in the coal industry around 155 million tons. But it is on that figure that we feel obliged to recognise that the Economist of 22nd July estimated on Coal Board authority that it would mean a displacement of 40,000 men in each of the three coalfields, Scotland, South Wales and the North-East, with the residue coming from other coalfields.
That is undoubtedly an unprecedented sound of alarm, but when we explore the nature of the withdrawal of imbursement in the Clause we find that it will precipitate a further cut-back in production, with an even greater displacement of men. It seems to us that such a perceptible fact can be summarised in one word—sacrifice.
1.30 a.m.
What do we mean by sacrifice? It is far from any euphemism. We must appreciate that such an idea could have a devastating effect on the coal industry and its employees. For years the industry has tried to ward off the expected effects after 1st April, 1971. It should, none the less, be permissible to say that, in the competitive race and to keep men in employment, no end of advice has been given to the Board to improve its efficiency by urging it to transform to competitive conditions, to play its full


potential part in the economic life of the country.
All the reflex action is bound up in the sensitiveness of the Coal Board and the miners in being commended to adapt to technological change. But the motive force of the Clause after 1st April, 1971 deprives them of the benefits of surmounting the many problems and difficulties of the economic stratification of the industry. Nothing is plainer than that. Often they have been discussed so much in facts and figures that at times one would think that the Board and its employees were just another body of statistical gymnastics.
Indeed, during the last few weeks, the miners have marched past a historic landmark. For the first time, productivity has exceeded 40 cwt. per man shift, but such an undeniable achievement leaves one wondering how far that would succeed as a final base in the competitive struggle. If there is any arraignment in that complex labour activity, it should not be forgotten that the miners have not created industrial trouble for more than a decade. They are led by dedicated and devoted men. Their reputation is a manifestation of collective responsibility in the national interest. They have cooperated with the Board in moving men between coalfields in which, it was understood for so long, there was an assurance of continued employment.
A short history of that community is that countless men have been shunted from pit to pit as a consequence of closure upon closure. That in itself has created a social crisis of the first order. The vast preponderance of those involved, both men and management, are vastly worried by this swiftening onrush of pit closures. As the Clause encourages industry to purchase more coal up to 1st April, 1971, we consider it helpful.
To avoid more redundancy than is necessary, the N.U.M., for example, does not disagree with the general aim of exploiting North Sea gas as soon as possible. But with the withdrawal of the support to the gas industry, we believe that that must not involve damage to the coal mining industry, and in any estimate of using North Sea gas, the Government must take into account the economic and social costs of the rapid rundown of the coal industry. Up to the present time it

has not been disputed that North Sea gas is a short-lived fuel. It seems logical, therefore, that one must not incur long-term damage for short-term considerations.
We are quite willing to enlist our support in the Clause to enable the gas industry to use more coal, but it is also our view that natural gas from the North Sea should replace imported fuels and not indigenous supplies of fuel. We believe that in any rational fuel policy it is necessary to balance the gains of the gas industry against the losses of the coal industry of a decline in coal consumption.
In expressing the right to conceive the costs incurred between 31st July, 1967, and 1st April, 1971, it is a well known fact that those engaged in the coal-mining industry are, throughout their daily lives, in constant struggle with their emotions and trying their level best to suppress them. The imposing effect of the Clause makes those of us from the North-East and other coalfields feel that there is something to be emotional about. We do not accept that we must be trapped by circumstances, because the circumstances that will be brought by implementing the Clause will be the result of decisions in which innocent people will have misfortune to face.
We therefore cannot conceal our deep concern, which is wrapped up in the Clause. To put it another way, just as hedgehogs are born without spikes, we all know how they prick after they grow up. At least I do, because when I was a boy I tried to grab one. That is how I feel about the Clause. It should bring judgment to bear on the necessity for a much slower rundown of the coal industry, not only for the sake of coal but for the economy as a whole.
We therefore feel justified in our action in asking to leave out "1st April, 1967". We need to avoid the Clause striking its fangs into the hearts of areas which rely on the coal industry simply because, whatever side we extend our vision, the basic fact remains that jobs in mining and in mining areas are going to be drastically reduced. Despite the new measures recently announced by my right hon. Friend the President of the Board of Trade, our previous experience in this direction has been bitterly disappointing.
To keep redundancy at the lowest possible level, the deletion of "1st April, 1971" should lead to a more positive way to stimulate morale. I therefore ask my right hon. Friend to allow the N.C.B. to put up the best possible bid it can for a coal fired power station in place of the nuclear idea at Seton Carew because coal costs are more likely to be proved accurate. My right hon. Friend has repeatedly said that putting Seaton Carew on nuclear would have no effect on the consumption of coal until the station begins to come into operation in 1975.
Heaps of facts, figures, and information have been presented, but, in view of the possibilities and bearing in mind the recently announced need of the Government to cut back spending in the nationalised industries, some of us think that this will have some bearing on the huge investment in the second nuclear programme. Since devaluation is bound to affect the cost of nuclear power stations because of the increased cost of uranium imports, we would hope that the Coal Board's estimate of a cost of £300 million more for a nuclear station than for a conventional one, will be given serious consideration. That would at least to some extent nullify the real social costs of the damage which could he done to the coal industry.
That might well be, but the effect of this Clause after 1st April, 1971, will mean that the excess cost of social benefit will be paid to thousands whose work will not be required; and what is an infinitely greater worry is the multiplicity of younger members of families who will be looking with forlorn hope for employment as a consequence of the sacrifice of huge public investment in reconstructed collieries.
Historians may argue that our troubles began at the Tower of Babel, when languages were multiplied and when men were dispersed; when there was the problem of organising the world on a plane of high ideals of knowledge, of faith, and of human service. But, as this Clause stands, and if the Government recognise only a doctrine of cheap fuel policy as the price to be paid by people who have applied their great courage and endurance, their skill and their will to work only to find that they are condemned to

despair and hopelessness, even although all the human problems are alleviated following the closures which will result from the operation of this Clause, then we shall be in trouble of incalculable magnitude.
That, at least, should convince the Government that priority should be given to the investigation into the fullest utilisation of the Coal Board's reserves in order to prevent redundancies. Obviously, the Government commands the dominant means of explicit decision but, to be quite frank, if a nuclear power station is built at Seaton Carew, it will be an economic man-made disaster for the North-East. The effect will be extended over all the multifarious branches of the industrial population, affecting mining and non-mining communities alike.
This Clause makes us feel and confess—and we have been through strikes and lock-outs—that this is the first time we have been on our bended knees; but it is not benevolence that we ask. It is the total sum of our duty to appeal for the right to be given the opportunity in industrial progress because such guided zeal can be proclaimed as the triumph of individualism and competition in the coal industry.
Our concern with the Clause is not an exercise of magnanimity of a gift that we seek for a coal-fired power station; it is solely with the supreme issue of the national cost of closing down groups of mines which otherwise would produce coal for power stations. It is upon such a decision that its successful execution would be a welcome relief from all the anxiety; it would irrevocably advance the happiness, the satisfaction and the prosperity of all concerned. In the circumstances, we would be most extremely grateful for any enheartening information he can give, which will be of great benefit, particularly to the Durham coalfields.

1.45 a.m.

Mr. Webster: A very moving speech has just been made by the hon. Member for Blaydon (Mr. Woof). He talked of the various dates. I will not go into the merits of Seaton Carew, but I would ask the Minister whether in his calculation of dates he has made any assessment of how it might all harmonise with the European Social Fund as operated by the European Iron and Steel Community.
The Government have stated from time to time that they wish to enter the Communities and to harmonise our arrangements. Some time ago, with the right hon. Gentleman the Member for Llanelly (Mr. James Griffiths), I had the privilege of going to the Borinage coalfield, and of going down one of the most inefficient pits. We saw men being laid off, but it was encouraging to see the type of assistance that was being given.
I will not, at this late hour, elaborate the details except to say that if it was a Community decision, half the cost was paid by the country concerned and half by the Community to provide full pay for four months in the first year of unemployment, provided that the man was taking full retraining under the rehabilitation and retraining scheme. For the next four months, there was a slight reduction in the amount paid, but it was still quite adequate and generally to the satisfaction of the people in the industry concerned with whom we talked. There was a further reduction in the last four months, and it was done more on a part-time basis while the men were trying to get work.
The problem of mobility was considerable, but I gather, having recently been back to the Community, and inquired, that it has either been successful, and so has had to be extended, or necessary, and has had to be extended. I am not sure whether it is pressure from pressure groups that is causing this, but I should be grateful to know to what extent the Government are trying to harmonise with those in the Community.
That is why I wondered about the dates, because the Iron and Steel and other Communities within Europe are to be harmonised in 1970 and merged into one Community—and the Social Fund will, one presumes, be merged into one about that time. There is no magic in the date, but I hope that I am in order in asking whether the Minister has in mind any form of harmonisation, and what ideas he has for solving the problem that frequently occurs in this type of retraining, where the receiving union of the industry concerned refuses entry to the retrained men. This is a very difficult and controversial point.

Mr. W. Baxter: Anybody who comes from a mining family or from a mining

area will agree with the principle in this Clause, but most of us would disagree with the dates contained therein. I must make it abundantly clear that I wholeheartedly support Amendment No. 13, because I have seen very many pit closures in my constituency. Many men, during the last few years, have lost their jobs.
In case the Minister is not aware of the pits which have been closed, I propose to read the list to give some idea of the magnitude of the problem concerning men who will not come within the ambit of this Clause if the Amendment is not accepted. In the Kilsyth area, in 1956, Gartshore 3 and 12 was partly run down and 200 jobs were lost. In 1959, the same pit was completely run down with 400 jobs lost. In 1960, Dumbreck was run down and in 1963 Dumbreck pits 1 and 2 closed and 650 jobs were lost. In 1964, Twechar pit was closed and 260 jobs lost. Dullatur pit closed in 1964 and 260 jobs were lost. In 1965, Auchengeich closed and 40 jobs were lost. In 1966, the Dumbreck byproducts works completely closed and 100 jobs were lost. In 1967, the Gartshore 9/11 closed and 700 jobs were lost.
In Bannockburn, Cowie, Plean and Balmore, all built as mining villages with new houses, schools, clinics and churches, they have no industry whatever with the exception of the closed pits. These pits are as follows: Manor Powis, which closed last year and 746 jobs were lost; Plean, with 443 jobs lost, closed in 1963; Pirnhall, with 147; Polmaise 1 and 2, with 731; Polmaise 3 and 4, with 698. At the moment, there are 600 men working at Polmaise 3 and 4. This pit won the British award for the highest productivity of any pit in the country only three or four weeks ago, with an output of 48 cwt. per man shift, but it will be closed because it is producing coal for Longannot electricity power station and that power station is taking coal from another area.

Mr. Eadie: I think that it would be unfair to say that Polmaise will be closed in the near future. We have information that it will be a little time before it closes. My hon. Friend's constituents will read his speech and I should not like them to think that it is to close in the near future.

Mr. Baxter: Polmaise 3 and 4 will close in the near future. My hon. Friend says "a little time", but I think that it will not be long before it closes. It has been run down by a considerable number. I am greatly concerned about this. As I said in an interjection in the Minister's speech, I should like implementation of the promises made by the Labour Party before we took power, promises by the Minister and others, that industry will be provided in these areas before the pits are run down. In Kilsyth and the villages I have mentioned, no industry has been set up by this or the previous Government. The first priority should be to channel industry to those two areas of West Stirlingshire where we have had so many closures.
A considerable number of the miners affected will never work again. Some are aged between 56 and 60. If their pit closes within the period stipulated in the Clause they will get compensation, while those in the pits that have been closed in recent years get nothing. That is a grave anomaly. What is good for the goose is good for the gander—and it is good for the men who will lose their jobs in the immediate future that they should receive reasonable compensation from the Government, because of the terrible nature of the work they have done over the years.
I should like to see my right hon. Friend using greater imagination to try to devise a scheme whereby men who have served the industry for 40 or 45 years and have left it through no fault of their own, because of the closure of the pits, would receive reasonable pensions, so that they would not feel that they were no longer wanted by an ungrateful nation. They have a right to expect a reasonable income in the years ahead of them.
Most of them suffer from troubles and disease caused by work at the coal face, such as pneumoconiosis and injuries to their limbs. Few do not carry the scars of working for the benefit of the nation over the years. It would be a calamity, and a shame on the Committee, if we agreed to the Clause without my hon. Friend's Amendment. We must be seen to be fair to all sections of the community, and tonight we are dealing with

the coal miners, people who have unstintingly given of their life and effort to produce the fundamental wealth of the nation. We are still considerably reaping the rewards of their labour.
It has been said that the Amendment might be too expensive, but we have subsidised other aspects of our national life, and the money would return into circulation. We have spoken of subsidising industries, and there is no harm in that. We subsidise agriculture so that it can produce more foodstuffs at home to save the expenditure of foreign currency, which would put our balance of payments further into jeopardy. There is no reason why certain aspects of the coal industry should not also be subsidised. The nation would benefit.
Not to accept the Amendment would be a tragedy. Parliament cannot vote money to a man one day and refuse it to the man who was out of work the previous day. This could not be fair by any measuring tape. I appeal to the Minister to reconsider this Clause. If he does not do so I will be forced to vote against the Government tonight, although not against the principle of the Clause, because it stipulates dates which could prohibit many excellent men in my constituency from receiving their due reward. The due reward for their labours is that they may be allowed to live their lives in some degree of peace and quietness and with a reasonable income to make these days pleasant for them.
2.0 a.m.
If we were to do this it would justify our return to this House as members of the Labour Party, of the working class party, because most of us come from fundamentally working-class households and from mining households. My father was a miner and my wife's father was a miner. I recognise the difficulties which these men have faced and the great benefits which they have given to the community in the past and the present, and will give in the future. It would be remiss to forget them at this time in our development and if we alter the Clause to make the money available to all the men in the mining community who have been knocked out of work it would be one thing which would redound to our credit throughout the land.

Mr. Arthur Blenkinsop: I do not usually intervene in these debates, but as one who worked in the mining industry before coming to this House, and who represents a mining constituency, I want to elucidate some of the comments made by my hon. Friend the Member for Blaydon (Mr. Woof) and to refer to Amendment No. 27, which deals with the special assistance to ensure that more coal is burnt in the electricity and gas industries.
I want to refer to one extremely efficient and successful pit. Many of us fear that its future may be put in jeopardy unless the provisions are extended. I appreciate the work that the Government have done. It is far more than was ever contemplated in the days I worked in the industry under private enterprise. There has been a fantastic change. We have had some exciting developments in pits in my constituency. At the Westoe pit, where £8 million was invested as recently as 1957, there has been an enormous increase in output per manshift. It has risen from 18 cwt. to 57 cwt. and is going still higher month by month with the expectation that soon it will be over three tons.
We have new investment coming in now for further developments and new ideas in lighting and the rest. This means work there, including work for many older miners living in the area as well as those living more or less on the premises. It would be encouraging for them to have some assurance of an active future supplying coal for power stations in the neighbourhood. There are many whose hopes for the future are a further coal fired station at Seaton Carew.
It is, therefore, a matter of deep concern to all of them that all the efforts they put in to develop this technically advanced mine, with all the prospects of future advance, might be vitiated if they cannot see a reasonable opportunity of use of their product in the years ahead—and that means beyond 1971.
I am using this as an illustration that not only are we concerned about the position of run down pits which clearly are uneconomic and with the problem of how we can fade them, but also with the problem of how to make effective use of the most modern developments in the industry which it would be a tragedy to waste and destroy.
On that basis, I hope my right hon. Friend will find it possible to look again at this Amendment and give some assurance about the future use of the coal being mined from some of those most modern and efficient pits.

Mr. McGuire: I endorse what has been said by my hon. Friends, particularly by my hon. Friend the Member for Dearne Valley (Mr. Edwin Wainwright). I support the plea of my hon. Friend the Member for Blaydon (Mr. Woof) for a coal-fired power station in the Durham coalfield. He made that plea because he feels that the proposed run down in the industry would have particularly disastrous consequences for his area.
We are, in effect, debating whether to give the electricity industry money to take what it considers uneconomic coal, which has to be subsidised. The electricity industry, not because it wished to do so, but as a matter of Government policy, experimented with nuclear power, which has meant displacing from the power stations 6 or 8 million tons of coal which is now in stock. Now we are asked in the Bill to subsidise the electricity industry for what it considers to be expensive coal at a time when much of the coal in stock is the result of a wrong policy pursued by the C.E.G.B. in producing very expensive electricity.
My hon. Friend mentioned Seaton Carew. It is regarded in the coalfields generally, particularly in Durham, as being the Waterloo for the Coal Board in those areas, and Durham in particular, because they can see no hope otherwise—and the date 1971 will have no relevance if we get a further demoralisation of the industry through not building a coal-fired power station in the Durham area.
I support my hon. Friend's argument that it would be right and proper for the Board to put in the best possible tender for the supply of coal in that area, because if the estimates of the Board and the forecasts about the supply of coal and its cost were outrageously wrong, as the previous forecast of nuclear energy has been, it would not be a very big job to convert from coal either to gas or oil. That could be done at little cost and the nation would benefit from whatever fuel policy was adopted then. If a nuclear power station is built, it


will remain there whether we like it or not, even if the forecasts for it are outrageously wrong.
The lesson that we have learned about nuclear power, if we have learned anything at all, is that whatever forecasts have been made about coal, however optimistic they have been, have been bang on target compared with the forecasts about cheap electricity from nuclear power. As long ago as 1955, it was forecast that electricity would be produced from nuclear power at a cost per unit sent out 0·6d. That forecast has been nowhere near achievement, and I believe that there is no more chance of present forecasts being right in the future than that early forecast has been. I therefore endorse my hon. Friend's plea that this question should be seriously considered, if only to uplift the morale of the men in the coalfields, particularly the Durham coalfield.
The Bill envisages the giving of aid to men in the mining industry aged 55 and over for a period of three years until, in some cases, the age of 65 intervenes. I would like my right hon. Friend the Minister to examine the figures and to consider giving aid to men aged 50 and over for what, I hope, will be a temporary period. As I said in my previous speech, the mining community and the miners do not want dole, even if it is 90 per cent. of their pay.
What is wanted in the mining areas—and in industrial areas which are run down, particularly the older areas—is planned growth. We do not want the dolls' eyes and plastic flower factories; we do not want cottage industries. The fact must be faced that if we are to get big industry, there will not be an industry at the end of every street. Men will have to travel sometimes, perhaps a few miles, but it is far better to travel to a big unit to get work.
I instance the great success of the Tory-directed car industry at Halewood which has been a huge success and has attracted all kinds of ancillary industry. That is the kind of industry we should be thinking about when talking of replanning the derelict industrial areas. We want something which is properly planned.
In the meantime, however, I hope that we can consider the question of giving the 90 per cent. benefit, including unemployment benefit, only to men aged 55 and over. It has been argued often enough that men over 55 have the greatest difficulty in finding employment, but there will be a lot of resentment from men of 50, 51 and 52 who say, "I have no hope of getting a job. Statistics support me in this. Yet I must wait another few years." It is no good our telling them that this is merely a temporary operation and that we are getting the new industries to give them a proper job to restore their dignity. That will take time.
My right hon. Friend the Minister has been saddled with a job which is not properly his. It is a job which should have been planned a lot better. I appreciate what he has done. It is a new and revolutionary start. We have closed pits and other works before by indirect Government action through squeezes and freezes and we have never given the men anything. I recognise that this is a start and that it is a start in the right direction. Nevertheless, I believe that if we are really talking about planning, and mean what we say, this is really a bit of a sop, in a way, and I do not think people on these benches will take kindly to that. Notwithstanding we give 75 per cent. compensation to people at 55, that is not the end of the problem.
2.15 a.m.
We believe that it should be tackled far more forthrightly, tackled as an integrated Government plan. It is not much use taking this kind of action, and having the Minister of Transport planning her motorways and new roads, the Minister of Housing planning our new houses, the Secretary of State for Education planning our universities and colleges of technology, all in isolation from one another. They should all be integrated.
I make this plea to my right hon. Friend, to look again at the question of the age band of 55 to 65 and to start a little lower down the scale. I know that wherever we start somebody will argue about an anomaly being created; that if we set the lower limit at 50 people will advance the argument that men over 45 have the same difficulties. I recognise that, but I think my right hon. Friend


recognises that, in my modest way, I like to be reasonable. I think that it is generally accepted that it is the over fifties who have the greatest difficulties in finding new jobs. Even if they are 100 per cent. fit they have great difficulty in finding new jobs, and I am pretty sure that reductions in manpower will take place in areas where job opportunity is already very poor.
How will my right hon. Friend view the plea to have a look at the starting date, and examine Amendment No. 50 in the name of my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden)? Probably many miners became redundant as a result of the Government's measures of July, 1966. I ask my right hon. Friend to back date this provision by 12 months, from July, 1967 to July, 1966. I hope he will have taken these modest pleas to heart and will seriously consider whether he can reduce the starting age and put the date back 12 months. With these modest requests, I wait for his favourable answer.

Mr. Adam Hunter: I rise to deal exclusively with the redundancy payments scheme. I wish to support some of my hon. Friends who wish to change the commencing date and the terminal date.
I know a great deal about redundancy. I do not wish to appear to be vying with my hon. Friend the Member for West Stirlingshire (Mr. W. Baxter) when I say that in my area, where I live and work, we have also suffered disastrously from the policy of pit closures. In nine years we have lost 17 pits. In the County of Fife as a whole, where we had 10 years ago over 26,000 miners, we now find ourselves with a little fewer than 6,000. That should indicate that we in Fife do know what redundancy means. I myself, four years ago, was a redundant miner, and had I stayed in that pit I was sent to after being redundant I should have found myself redundant again, but, fortunately for me, I was sent here. Somebody decided I should come here, and I just came down and avoided another redundancy.
Seriously, the people who most deserve our sympathy are the men of 60 years of age. When my pit closed four years ago, no man of more than 60 was able

to find a job. Fortunately, that has now changed in Fife and when there are redundancies, men over 60 are given the opportunity of finding a job. But I still see those who were made redundant four years ago and who belong to this age group, men now 63 or 64, wandering about the village, lost, a pitiful sight, fit, able and intelligent men who have been idle for three or four years.
It is bad that these men should have had to live for three or four years on unemployment benefit and the £1 a week from the mineworkers' pensions scheme. Fortunately for the men who have retired since then, we now have the Redundancy Payments Act in addition to the Coal Board's redundancy scheme, but I am most concerned about men of 60 and less being idle.
I do not favour the proposed commencement date, with which the Minister should dispense altogether. All men now redundant, no matter when they became redundant, should be included in the scheme, and those who see redundancy approaching in 1971 or 1972 should also be guaranteed the benefits of this scheme.
Another category of men for whom I have great sympathy are the disabled, men in the age range of about 55 to 58 who before becoming redundant did light work in the pits and who would have been able to carry on until they were 65. They have now been thrown on to the scrap heap with no hope of getting another job outside mining. These disabled men should also be brought within the scheme.
I ask my right hon. Friend to give these cases very serious consideration.

Mr. Ogden: The Committee may have noticed a hardening in the tone of the speeches from this side. The Minister, who is a sensitive man, and his Parliamentary Secretary, have taken note of that. They have paid considerable attention to the debate as it has progressed. However, in spite of the meetings which my hon. Friends and some hon. Members opposite have had with other Ministries and Departments, I am beginning to be a little concerned about the lack of support on the Government Front Bench.
Perhaps the usual channels could say a word to our hon. and right hon. Friends


in other Departments such as the D.E.A., the Treasury, the Board of Trade, the Ministry of Housing and Local Government, because there are still 10 hours and 35 minutes before we count out the Committee tomorrow, and we may need all that time. There is a message there if anyone on the Front Bench, apart from my right hon. Friend the Minister, wants to take note of it.
While we appreciate that the Minister understands the arguments which have been put to him, it is time that he began to show some sign of accepting, or undertaking seriously to consider, one or other of the groups of Amendments available to him on this subject. In the current jargon, we have left him with many options open and he has only to consider accepting or considering accepting one of them. He could refer to my Amendments Nos. 50 and 51. I did not suggest these as an independent initiative. These options were laid out by the miners group as alternatives available to the Minister's consideration.
Amendment 50 gives the date of 17th July, 1967. It has never been clearly explained to me why 17th July, 1967, was chosen, unless it is closely linked with the fact that on 18th July we had a debate on coal.
That seems very strange, to say that the operative date for benefits should be linked entirely and closely with the date on which we had a debate in the House. That does not seem the best possible reason, and that is why I have put forward in my Amendment a date one year, less three days, earlier, a date which is much more appropriate. This is the date on which we began the freeze and the squeeze, a measure which I supported and still support. Responsibility for those measures rests with the Government, and from that date, anybody made redundant in mining or in other industry has found it much more difficult to get a new job.
This was a price which had to be paid for future prosperity, and the Government have a responsibility for the difficulties experienced by redundant miners in finding a job. That is why I suggested that the operative date should be taken back almost 12 months to the day the day the Prime Minister made his statement to Parliament, and for which I must take my own responsibility.
The point in Amendment No. 51 is that we should extend the period the other way, putting the date forward from 1971 to 1972. This gives a little more time. The basis of some of the arguments has been that there is lack of information and fallible forecasting. Nobody knows what is to happen, so why should we, in these circumstances, put down definite dates? I hope that the Minister will be able to say that he will agree to Amendment No. 13, in which we avoid a terminal date altogether, but if he cannot accept that I suggest that he might say that he will consider a later date.
I refer, in the presence of a new arrival, to the fact that some support should be forthcoming from other departments, from Ministers who should have been here earlier tonight. They still have time to come and show their support for these Amendments, and others which will follow.

Mr. Emrys Hughes: I do not apologise for making a few remarks in support of my hon. Friend's Amendments at this time in the morning, when so many of our people are on the night shift. The House of Commons should not begrudge the time which is devoted to putting the case of the miners likely to be made redundant as a result of changes in the mining industry.
I am not, as is my hon. Friend the Member for North East Derbyshire (Mr. Swain), an old miner, but I have been associated with the mining industry for a long time. I was born in the Rhondda Valley and my father was a miner who, luckily, found a job in an alternative industry. He became a minister. It will be very difficult for redundant miners today to become ministers. My background is that of having been born in the Rhondda and of having spent the first 30 years of my life in the valleys of South Wales, so I understand the problems which have been explained by my hon. Friends.
I live in a mining constituency. I have lived all along in mining communities—except for the three years when I was in gaol—so I understand the background of the industry. All my friends in the little town of Cumnock are all miners and I have been associated with them for all the time that I have been


in Parliament. I am quite sure that I am expressing their point of view when I ask the Minister to give the most generous concession that he can in response to the pleas which have been made to him by my mining friends.
2.30 a.m.
My constituency is very much like the constituency of my hon. Friend for West Stirlingshire (Mr. W. Baxter), who made such an eloquent appeal, and it is also very similar to the constituencies of my hon. Friend for Fife, West (Mr. William Hamilton) and the hon. Member for Fife, East (Sir J. Gilmour). But South Ayrshire will not suffer in the same way as West Stirlingshire, which has had so many pits close down and which has largely seen the disappearance of the mining industry. The problems of the mining industry in South Ayrshire are the problems of the smaller pits being closed down and the miners going from the smaller pits into the two larger pits of Killochan and Barony. These two modern pits have had a great deal of capital expenditure and they are likley to continue for the next 20 years.
As a result of the revolutionary changes in the mining industry, and in industry generally, we are likely to see the closing down of a considerable number of very small pits. South Ayrshire has the same problem about alternative industry, but we are lucky in this respect, because we have had a very great deal of attention devoted to this part of Scotland. I pay tribute to the Minister of State, Board of Trade, who has visited us, and to the work of the local council which has established the beginnings of a small industrial estate. We have a new industry. There is to be a rather large carpet factory. The problem will be how to bring into the carpet factory to make carpets the people who have been digging in the coalmine.
One problem will be whether we shall get sufficient industry in time to see to it that this redundancy problem will be solved in such a way that we will have nothing like the mass unemployment that I knew in South Wales 30 years ago and which I do not think is likely to come again.

The Temporary Chairman (Mr. Grant-Ferris): I am sorry to interrupt the hon.

Gentleman, but we must bear in mind that these Amendments refer to payments to redundant workers in the coal industry. I think that we should keep as closely as we can to the terms of the Amendments.

Mr. Emrys Hughes: I am sorry if I wandered a little, Mr. Grant-Ferris, but these are the thoughts that inevitably come to our minds and this is an opportunity to express the background of these particular Amendments.
I ask for the most generous treatment for the people concerned. I know that we will get such treatment from this Government. We would never get it from any other. Great attention has been devoted to this problem, but there is the problem of the disabled men, the men who are on the borderline, and the men who are not particularly suited to producing, for example, carpets.
I hope that in this transitional period we will see generosity associated with humanity to enable men to overcome the difficulties with which they will be faced, through no fault of their own. I hope that they will receive justice, so that there will be no lingering feelings of fear and doubt in their minds. I hope that they will be able to get through this transition period without the tragedy which they have seen in years gone by.
I reinforce the point of view expressed by my hon. Friend the Member for West Stirlingshire (Mr. W. Baxter). One pit in my constituency which is likely to be closed figured in a notable disaster some years ago. I would have thought that the men working in the Knockshinnoch colliery would have been pleased to hear that this pit was to be closed. I remember the time when it was flooded. For two days and nights we waited on the surface of the colliery for the men to be brought up, and by a miracle they did come up. I would have thought that the miners there would have been pleased to see this pit closed, but they regret that it is not to continue. This is because they fear unemployment, and its consequences. It is these consequences which we are trying to alleviate, and I hope that the Minister will be able to give a satisfactory reply to our pleas.

Mr. T. W. Urwin: Mr. Grant-Ferris, a few moments ago you reminded my hon. Friend the


Member for South Ayrshire (Mr. Emrys Hughes) that this debate was concerned with payments to redundant miners. I am mindful of the importance of such payments, but I draw attention to the fact that Amendment No. 27 refers to payments to the C.E.G.B. and others because of the extra coal burning which is envisaged in the Bill, and, indeed, in the White Paper.
I want to preface my remarks by drawing attention to the fact, if it is necessary to do so, that on a matter which evokes such emotional feeling as this subject does amongst people who have spent their lives either working in the industry, or representing those who work in it, it is not unnatural to hear the highly emotive speeches which have been made by my right hon. and hon. Friends. The impact of social economics is something with which we are closely conversant, coming as we do from these areas of heavy industrial intensification. I want to take this opportunity to congratulate those of my right hon. and hon. Friends in the Government who have responded magnificently by trying to provide new job opportunities for redundant miners.
Regardless of the efforts which have been made, and bearing in mind just how great they have been, it is wholly impossible for new job opportunities to be provided to keep pace with the existing requirements. We in the northern region, part of which I am proud to represent, are fully conversant with the difficulties, and know only too well the additional burden which has been thrown on the Department of Economic Affairs and the Board of Trade in trying to provide alternative jobs in the face of this terrific rundown.
Even despite the advantages that were introduced by the last statement of my right hon. Friend the President of the Board of Trade on 14th November of five years rent-free factories and favourable interest rates on building costs, it just is not possible to take account of the cutback, the new job requirements incumbent upon them in face of the fuel policy operated at present by the Government.
As I said that I would deal with Amendment No. 27, and as it does specify certain provisions to the Central Electricity Generating Board and others, my

attention, quite naturally, is fixed on the provision of electricity by nuclear power, or alternatively, by coal as the energising fuel. My hon. Friends the Members for Blaydon (Mr. Woof), South Shields (Mr. Blenkinsop) and Ince (Mr. McGuire) have drawn attention to the raging controversy which has taken place over a considerable period now in relation to this matter. There has been and continues to be a good deal of anxious speculation amongst the mining community in the Northern, Region, and in the immediate area of Seaton Carew, about the fuel which will be used for this power station.
I think it reasonable to suggest that if the Minister should decide in the near future that this station should be fuelled by coal, nothing would provide a greater incentive to those of our people who depend on coal for their livelihood. It has been described by the National Union of Mineworkers in the Durham area as an act of sheer lunacy to suggest that this power station, sited as it is on the perimeter of a highly productive coalfield, should possibly be powered by nuclear energy.
Here we have a situation where there is a belt of collieries, all of them highly productive and highly modernized, which could literally pour in coal to a power station, more especially if the siting had been only a few miles nearer to Seaton Carew, by a conveyor belt system far more cheaply than nuclear power could hope to compete with.
The forecast of the Coal Board, even on the site selected, of 3d. a therm compares more than favourably with the computations which have been called into account by many of my hon. Friends about the cost of nuclear power. The effect of the cutback in mining, and, indeed, the real danger of further difficulties devolving upon the mining industry in this immediate area—

The Deputy Chairman (Mr. Sydney Irving): Order. I am finding difficulty in seeing how the hon. Member is referring his remarks to the Amendment, which is concerned with dates.

Mr. Urwin: Amendment No. 27 does deal, as I have already stated at the beginning of my speech, with nuclear power and the provision for the Central Electricity Generating Board and others of extra money—

The Deputy Chairman: Order. Amendment No. 27 says "leave out' and 1st April 1971.' ".

Mr. Urwin: I accept your correction, Mr. Irving. I would point out that if this Amendment is not accepted, bearing in mind that it takes, according to the Minister's words in the White Paper, five years from the beginning of a power station to completion and beginning to work through the economy, the term "1st April 1971" in this respect is relevant. It would be extremely damaging to the industry in the part of the country about which I am making my remarks if the period of Exchequer support ended on that date.
If the provision is not extended beyond 1971, the impact will be felt not only among the mining industry, but among the ancillary industries in this part of the country which are directly involved, such as transport and the docks.

2.45 a.m.

Mr. J. H. Osborn: In view of your predecessor's Ruling, Mr. Irving, I think that the remarks which I had intended to make on the Question, "That the Clause stand part of the Bill" are better suited to the Amendments, which deal with the dates 17th July, 1967, and 28th March, 1971. Those already declared redundant will naturally ask why they are not included in the scheme, and, after 28th March, 1971 there may be others who would wish to come in.
That is the effect on certain people who are already redundant and will not get the benefit, but it is equally difficult to ascertain to what extent miners will be better off than people in similar industries in the area. Why single out miners for redundancy terms better than those in other industries? There is general suffering.
I do not want to belittle the hardship of those in the mines, but this will demand money. As subsection (2) says:
Any sums required by the Minister for making payments under"—
such a scheme—
shall be defrayed out of moneys provided by Parliament.
This extra money must be paid by the taxpayer. I do not dispute the genuine need, but it is easy, when debating mining and miners, to disregard the hardship of

others. In other industries the economic situation which has affected this industry, plus rationalisation and other pressures, is creating redundancy in industrial areas with mines. An explanation would be valuable.
Subsection (1,a) uses the phrase:
are employed at a coal mine or at any place of a prescribed class used for providing services or facilities …
How far will this term be extended to other miners not down the pit? It would be helpful if the Minister could elaborate on what classes would be included or excluded. I have mentioned people in brickworks and other industries. What is the limiting factor and what other Coal Board activities will come under this Clause? While subsection (1,a) refers to
… at any place of a prescribed class …
subsection (5) says:
In this section 'prescribed' means prescribed by a scheme thereunder.
A word of explanation about this would be of value and if it is given, I will have no comments to make on the Clause as a whole.

Mr. Ridley: We have had a wide-ranging debate on what I thought would be a rather narrow Amendment about the date on which the scheme for pensions for the 55-year-old and older miners should end. The discussion has covered nuclear power, Seaton Carew—a dispute into which I will not enter tonight—and the closure of pits in Scotland and elsewhere. It has also included a fascinating autobiographical survey by the hon. Member for South Ayrshire (Mr. Emrys Hughes), dealing with redundancy among ministers, but I understand that he was referring to ministers of the church. For a moment I was hopeful that the Treasury Bench was about to be looking for new employment.
My hon. Friend the Member for Ayr (Mr. Younger) had a good idea when he suggested that we should write into the Bill that the date could be altered by Order. The hon. Member for Dearne Valley (Mr. Edwin Wainwright) also made an important point when he said that if there is a deadline, even though it be an administrative one, when the scheme will end, this will have a severe effect on the morale of miners and, perhaps, on the manpower situation in the mines, for as we approach 1971 people


will feel that unless they get out by that time they will not benefit from the Clause.
I have no doubt that the Minister will say that he will make a new scheme under the Clause and bring all the benefits to an end in 1971 so that he may recreate them after that date. However, in view of the case which has been made tonight, he may care to reconsider the matter and amend the provision to give power co increase by Order the moneys provided under the Bill when the time comes and we reach 1971. These arguments do not apply to the coalburn under Clause 6 or the pit closure provisions in Clause 5, because there is no question there of the individual being affected.
I do not support the case made by several hon. Gentlemen opposite that the scheme should be backdated to 20th July last year, that ill fated date which hon. Gentlemen opposite carry engraved on their memories—that cataclysmic date when the Labour economic myth came to an abrupt end. Why we should go back to that date I do not know. It seems undesirable that we should go back to 17th July this year, because this is, in effect, giving legislative authority to something which presumably has been done before the Bill was introduced. It amounts to giving retrospective approval to something already done.
If this is so, why has no scheme been published? What about the details of the scheme which we will have under the Clause? If there is not such a scheme, how have these pensions been paid back to 17th July? If none has been paid, what is the point of stating in the Bill that pensions can be paid as from 17th July? This is a conundrum and it would seem undesirable to carry the authority back still further into the past.
I should very much like to know a little more about those whom this scheme will benefit. We are authorising presumably an expenditure of £45 million, but we have been told nothing about the exact nature of the scheme which will need this by no means inconsiderable sum. We know from a pamphlet which has appeared that it will apply for three years and that miners will have 90 per cent. of their past earnings, provided they qualified under certain conditions. They will receive redundancy pay as well—

or will that be deducted from the benefits given under this scheme?
Some miners will receive £1,100 or £1,200 in a lump sum, and they are very welcome to it; they are entitled to it, but what effect will this have on their entitlements under this scheme? Then there are supplementary benefits of up to 80 per cent. of past earnings and is it intended to make up wages under this scheme or pay pensions which include unemployment pay? Or will this be on top of unemployment pay?
These are all very relevant features one can think of and about which we should know more. If it is not on top of unemployment pay, then the benefit may be worth only a few shillings. We do not know. It could be 15s. Of course, one can imagine that it could be £15, or, in the worst cases, 15d. We do not know how this will fit into other Ministry of Labour benefits. I support any measure for retraining for new skills, and for assistance if necessary in moving to a new area so that people can bridge gaps in their careers, but, before we leave this Clause, we are entitled to have a great deal more information about what is intended. After all, it is not usual for the Minister of Power to bring in at three o'clock in the morning a scheme which introduces an entirely new class of pension.
The questions one could think about are legion. Many hon. Members have spoken of what will happen when a miner retires, or is classed as redundant in the sense that his pit has closed. That may happen when he is 55 years of age, and at 58 if he has still not got a job, he goes down bump to a lower scale. Presumably, a man of 54½ will get nothing under the scheme—or will he? One could think of brothers with one getting full wages for three years, while the other, only a year younger, will get nothing out of this scheme. Will the 55-year-old miner automatically come under this scheme? These are the sort of questions which are important.
Let us suppose that a pit closed, say, last June. Would the men from there never be eligible under the scheme? We see demarcations of such importance that they cannot be passed over. I admit that this is a rotten time to consider them, but I am surprised that, with all the euphoria in connection with the Bill, hon.


Members opposite have not made more of these points.

3.0 a.m.

Mr. Swain: If the hon. Gentleman looks at Amendment No. 14 he will see that all the points he has raised will be elucidated in the debate on it.

Mr. Ridley: With respect, if the next Amendment to be taken were accepted it would give the Minister power to pay a pension to a 16-year old boy, because it would remove any age qualification at all. I look forward very much to hearing the hon. Gentleman's defence of that proposition, with which I cannot agree. I will then with pleasure listen to a great many hon. Gentlemen opposite talking about the difficulties of the scheme.
But I must say, Mr. Irving, that we have had such a wide-ranging debate that it rather surprises me that, in their many speeches, hon. Gentlemen opposite have not touched on any of the anomalies or difficulties arising from the date, from other existing pension provisions and from Ministry of Labour arrangements—

Mr. G. Elfed Davies: I intervene to tell the hon. Gentleman that he is dealing with the subject matter of Amendment No. 14.

Mr. Ridley: I have been arguing, amongst other things, that the date should not be changed, and this is one of the matters that is relevant to this Amendment. If I have gone slightly wider than I should in discussing the Amendment, I am sure that hon. Gentlemen have gone a lot wider still in talking about the cost of Seaton Carew. We even had the autobiography of the hon. Gentleman the Member for South Ayrshire, which we all found most interesting.
A consideration raised by my hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) was the effect on other trades of allowing three years benefit to miners on early retirement. The man who works in the same pit—perhaps an electrician or a haulage contractor—or someone working alongside who mines phosphate, iron ore or some other commodity, in conditions of equal discomfort, unhappiness, danger and risk—if that man's pit closes he gets nothing at all.
These are serious questions, and they must be considered by the Committee. I hope that before passing airily on the Minister will deal with the whole range of questions raised by this or the next Amendment. I am sure that we shall have a spirited debate on the next Amendment, and I look forward to it, but I now would like to hear the Minister's explanation of the rather blanket powers he seeks to take.

Mr. Marsh: One of the attractive things about a debate on coal in the early hours of the morning is that it does galvanise the Opposition into action. The hon. Gentleman the Member for Cirencester and Tewkesbury (Mr. Ridley) has asked a number of questions arising from this proposal, and I shall deal with them. But it is reassuring, because I announced the scheme in the House on 18th July, and it takes the hon. Gentleman until December before he starts asking questions. I am pleased to know that he takes an interest—

Mr. Ridley: Can the Minister say when there has been a Parliamentary opportunity to debate the scheme before now?

Mr. Marsh: I must say that I would lose faith in the hon. Gentleman and his hon. and right hon. Friends if I thought that they could not in six months find an opportunity of asking a Question on a subject which, as he himself says, is of extreme importance.
I will deal with the various points the hon. Gentleman has raised, because this is a very important Clause. It contains a unique scheme, which is a particularly important development. I make no secret that it is not a solution to the problem. I readily concede that fact.
What miners need, whatever their age, is work; they do not want benefits of any particular type. The first priority must always be in these circumstances the provision of alternative employment. I take the point made by some of my hon. Friends that it has to be real employment. The Board of Trade, the Department of Economic Affairs, the Ministry of Transport and I are engaged in exercises designed to tackle this problem, which is the root problem. While that is happening, whatever is done there is a problem in this particular industry. It


is a very specialised problem and it is very peculiar to this industry.
As the hon. Member for Cirencester and Tewkesbury pointed out, this has been a fairly wide-ranging debate. I do not think that I can get involved in the Seaton Carew argument, except to say that no decision has been made. It is a very complex subject. If one does not build a nuclear-fired station, but a coal-fired station it does not necessarily follow that this is the best site for such a station, or for that matter, for a nuclear station.
My hon. Friend the Member for Houghton-le-Spring (Mr. Urwin) was even more ingenious. He managed to Debate Amendment No. 27 to Clause 6, which seemed to be the best achievement so far.

The Deputy Chairman: In fairness to the hon. Member, I should point out that Amendment No. 27 has been selected for discussion with this Amendment.

Mr. Marsh: I agree, Mr. Irving. The question of coal burning was a matter which he had strongly in mind.
It has been asked: why should we single out miners? The hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) and the hon. Member for Cirencester and Tewkesbury said that this will lead to demands from other sections of industry as it produces anomalies and unfairness. There may be neighbours living next to each other and both declared redundant in similar circumstances, yet one will get benefit and the other will not. This idea arose, I freely admit, as a result of a discussion with a group of miners' officials in a "pub" on the eve of a miners' rally. We talked about methods that could be produced to meet this social problem.
We can always argue about the age and say that there is no difference, in effect, if a man is 54, 55 or 56, but a line has to be drawn somewhere. A man of that sort of age entered a very different mining industry from that which exists today. He spent a large part of his early life in conditions which are probably not matched in any other industry today and which were worse than conditions in the generality of industry. The fact has to be faced that many of the people of that age in the mining industry, while not registered disabled persons within the meaning of the law, are persons whose health is at the best indifferent compared

with the generality of workers. Many of them have been employed in the pits by the Coal Board which has done a superb job, but as the number of pits has declined so has the number of jobs available for this type of people. This is a problem which can be argued on the basis of coal miners. No doubt it will be used elsewhere, but we shall have to meet it on its merits when it is raised. There is a special problem here and it has to be faced.
Much of the discussion has centred around two points—the end date of March, 1971, and whether we should have the starting age of 55. I was also asked how the date of 17th July, 1967, was decided. The Amendment would be completely open-ended for the future. One of the problems is that the Clause is part of an over-all Bill for a transitional period up to 1971. The Bill then expires as a whole, together with all the financial provisions. Before then, the House will have to debate what happens next. It may be that other provisions, perhaps bigger or smaller, will be needed. But it would be a bit incongruous if the House were committed to maintaining just one Section when the rest ceased to have effect in March, 1971. That does not mean that there will be a debate in March, 1971; there will have to be a debate before then.
The intention behind the Bill is to give the industry a breathing space so that it can compete. We shall have to see how far it has done that and then we may want to extend or change the provisions. Therefore, it is probably better that the whole Bill should go together, because it is part of a closely interlocked exercise.
My hon. Friend the Member for Ince (Mr. McGuire) fairly said that if he "plonked"—if that is a Parliamentary expression—for the age of 50 somebody could legitimately show exactly the same anomaly concerning the man who is 49. It was on 18th July that I announced the idea to the House. The hon. Member for Cirencester and Tewkesbury expresses legitimate doubts about retrospective legislation, and I think that Parliament would not tolerate our being retrospective to a time before the first announcement of the idea. I announced then that I proposed to introduce a


scheme of this sort for the redundant miner aged 55 or more. I afterwards had discussions with the National Union of Mineworkers, and on 25th July I wrote to the union confirming that I would ask Parliament that the scheme affecting redundant mineworkers aged 55 or more should apply to men affected by closures which took place on or after 18th July. It duly noted this correspondence.
The hon. Member for Cirencester and Tewkesbury raised a number of questions about the scheme. It is highly complex and unique. It has not been tried before, and I am not sure what will emerge at the end. It means taking into account all the varying benefits and trying to ensure that a person does not suffer an abrupt drop in his standard of living. The benefits taken into account vary of themselves. The hon. Gentleman raised the classic example of unemployment benefit and the supplement. Under the scheme a man will get unemployment pay together with the wage-related supplement. In the second six months he will lose the supplement, which is then made up by the scheme. At the end of 12 months he will have lost both the unemployment benefit and the supplement, and, therefore, both are made up.
The hon. Lady is a lawyer, though I do not hold that against her. She will recognise what sort of complexities are involved in legislation of this type. Therefore, the regulations will come before the House. I make no secret of the fact that they are not yet complete. Before they are brought to the House discussions will take place with the N.U.M., which is intimately involved in this.

3.15 a.m.

Mr. W. Baxter: What troubles me to some extent is the position of the man working in a pit which closed in June, 1967, a few days before 17th July. He may have devoted the whole of his life to the mining industry since he was a boy of 13 or 14 and is now about 60. Another man may be employed in a pit when it closes on 17th July. He may have come into the industry to do a particular job and have served only five years. He gets a redundancy payment and pension rights but the old miner gets nothing at all. What is a valid

reason for that? Why not introduce a scheme applicable to all miners who have become redundant through no fault of their own based on years of service as all good pension schemes should be?

Mr. Marsh: The anomaly which my hon. Friend mentions is one which exists with any date. There will be people made redundant before the date who will be outside the scheme. The difficulty is making the money available retrospectively. This is not only a Parliamentary problem. To make an Act retrospective several years before it was ever mentioned when public money is involved would produce an extraordinary situation and it would be almost impossible to trace all the men to whom the benefits were to be paid.
The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) asked how the money was being paid out at the moment. It is not. No moneys are being paid out and no scheme is being operated. It would be wrong to do so until Parliament has approved the scheme. We have managed to keep in contact with every miner declared redundant since 18th July. We know where they are and if Parliament agrees to the Clause we can pay the money.
The hon. Member for Weston-superMare (Mr. Webster) raised the question of harmonisation of the benefits with the European Coal and Steel Community Social Fund. This is an extremely interesting fund. If Britain enters the European Economic Community this is something that we will have to look at and we will have to be prepared to make changes. The date of 1971 is significant here because this is about the date when such a thing might have to be considered.
What the men want is work and not social benefits. This leads one to consider retraining and, having been retrained, the acceptance of the redundant miner as a colleague by other unions and other people. There can be no justification for any tradesman refusing to work with a man, who can prove that he can do the job, because he comes into an industry at 40 instead of 16. We have had, on the whole, enormous support from some of the craft unions, who also have real problems. It means a revolution in thought for them. This part of


the exercise is going very well, although there are patches here and there which it is better to deal with quietly rather than publishing a pronunciamento.
Having raised difficulties over some of the Amendments—and I understand the problems as my hon. Friends see them—I give my hon. Friends the assurance that the regulations will come before this House for approval and that they will first be discussed with the unions. In these circumstances, I hope my hon. Friend the Member for Dearne Valley (Mr. Edwin Wainwright) will see fit not to press the matter.

Mr. Edwin Wainwright: In view of what my right hon. Friend has said, and the guarantee he has given to consult the unions about the regulations, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Harold Finch: I beg to move Amendment No. 14, in page 2, leave out lines 32 to 34.
Some of the points I shall raise have already been referred to by my right hon. Friend. The words we propose to omit prescribe that the payments shall be made to persons who have become redundant
… after attaining the age of fifty-five and before attaining the age of sixty-five …
I am glad to hear that my right hon. Friend will consult the unions before introducing the regulations but the fact remains that, whatever negotiations take place, unless we amend this Clause, they will be restricted to the age limits now prescribed in it.
I am particularly interested here in the disabled men. If the scheme proceeds as at present proposed, it means that very many of the disabled will not be included and to me, a disabled man, whether he be 35 or 55, if he is declared redundant and is incapacitated, he should be paid under this scheme generally.
There are many thousands of men in the industry suffering from pneumoconiosis. Many of them are in the South Wales coalfield. I ask my right hon. Friend to give the Clause further discussion and not restrict it to the age group 55 to 65. Some years ago, men suffering from this disease were prohibited from working in the industry. The medical boards at the time said that

once a man had pneumoconiosis he must get out of the industry. Later, the Medical Research Council, after examining hundreds of men in South Wales, concluded that those in the early stages of the disease could go back to work in the industry under approved conditions.
Thousands of these men are working in coalfields. Many of them, when closures take place and they are declared redundant, are doing the same work for the same wages as before they contracted pneumoconiosis and will not be entitled to hardship allowance.

The Temporary Chairman (Mr. Grant-Ferris): Order. I would be grateful if the hon. Member would explain how what he is saying comes within the terms of the Amendment.

Mr. Finch: I am asking that certain words be omitted from the Clause so that my right hon. Friend and the Coal Board and the unions can discuss the introduction of a wider basis for these redundancy payments. Under the Clause, the age must be between 55 and 65. There are many disabled men in mining who are under 55—even aged 40—who are seriously incapacitated. If they are declared redundant, their position will be prejudiced because they will be back at work and will not be able to get hardship allowance. They will be at a serious disadvantage.
That is why my right hon. Friend should have the opportunity, before restricting the age to 55–65, to discuss the matter with the Board, the National Union of Mineworkers and the Ministry of Social Security, so that he can bring forward a Clause which is not restricted to the ages of 55–65.
It is most difficult for the disabled to find work elsewhere. Whatever factories are introduced into an area, it will not be easy for the partially disabled who are fit only for light employment to find work. That is all the more reason why a man under the age of 55 who is seriously incapacitated, if he is declared redundant under the pit closure scheme, should get the payment that the scheme is intended to apply to those between the ages of 55 and 65.
One of the most serious social consequences of pit closures is the position of the disabled man. Whether he is 45 or 55, he will be in serious difficulty.


That is why I ask my right hon. Friend to make the Clause less restrictive so that, in consultation with other Government Departments, he can introduce a wider scheme.
In any event, the scheme will be a difficult one to apply. I know that there must be demarcation limits. A man aged 54 years and 11 months will not qualify, but a man aged 55 will. This will create disagreement among men. It would be far better in such a scheme to say that as long as a man is unemployed and cannot be provided with work, he should get some form of payment. The onus should be placed on the Ministry. If a man is declared redundant and the Ministry cannot find him a job, he should be able to be paid under whatever scheme my right hon. Friend has in mind.
Whatever discussions take place with the National Union of Mineworkers, a man aged 45 who is seriously disabled will not get assistance under the scheme unless the age is amended. I hope that my right hon. Friend will accept the Amendment and thereby be enabled to introduce regulations of wider scope.

3.30 a.m.

Mr. Swain: This is a very interesting stage of the debate tonight. We are just getting to the concessions which we are asking from the Minister for the men in the industry.
There are some interesting and important figures about the age grouping in our industry. In a Written Answer from the Minister to myself today I am informed, and I will inform the Committee, that there are 101,671 men in the industry at this moment over the age of 55 years. When we consider the total number of men, 385,000, we realise that this percentage of men over 55 is very high indeed. At long last our forecasts made in 1959 and since have come true, and we have a mainly unbalanced age grouping within the industry.
The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) said—I do not know whether he said it irreverently or seriously—that if we accepted the Amendment it would mean that a boy of 16 could get a pension. I think that that was going rather to the extreme. What we are bothered about is the fact that at whatever age a man is declared

redundant the stigma of unemployment on the man is the same whether he gets nine-tenths or one tenth. There inevitably arises a period, after redundancy, perhaps of immediate retraining or perhaps unemployment prior to retraining. As I see it, however ambitious our training centres building programme is, there will be a residue of men in the process of retraining who cannot be absorbed. If a man is declared redundant at 55 or 50, then he will have to go on the dole and the social security benefits arising from unemployment.
Under the Bill, a man at 55 will get nine-tenths of his wages, but the Committee must appreciate that this industry of ours is a unique one, and at 55 a man's physical condition is deteriorating considerably. At 55 his life at the coal face is almost over, and in nine cases out of ten is over. As a consequence of an agreed scheme of years ago, a manager can give him 10 days' notice and he is reduced, and will be reduced, to one of the four grades of day-wage earners. Therefore, all that that man can qualify for is nine-tenths of Grade 1, 2, 3 or 4 of the underground or surface rates.
If we look at nine-tenths of the benefits under this scheme of wage—related benefits we find that it is very little more—I quote the hon. Member opposite: it is only a few bob more—in most cases than he would get if he were on the dole and receiving full benefit from social security and perhaps some supplementation. So what the Minister is giving away in this respect is very little indeed. I do not think that he is giving enough. He cannot increase the physical capacity of the men in the industry; he cannot decrease their natural age: so the only way he can help the industry over this very serious transitional period is by extending the age downwards from 55, down to another age. Men of 35 should be included if they are made redundant.
I do not say that it is wrong or bad practice, but it is my experience that colliery managers do everything possible to encourage older men to leave face work so that younger men can be brought in to do it. The industry will have a younger labour force of men between 20 and 45 who will be mobile and mostly prepared to move from one district to another, which is what the older age groups cannot do.
To cover what will undoubtedly be a short transitional period—for it will be easier for men under 55 to get a job—men who become unemployed should receive related benefits, nine-tenths of their earnings, until such time as they find other jobs. The Minister would be doing a good turn not only to the industry but to the country if he accepted this proposal, for he would keep these men free of the dole. I am convinced that Ministry of Labour officials and everyone else concerned would be rightly instructed to be on his toes to find these men jobs as soon as possible.
The Minister would be well advised to accept the Amendment which would improve his Bill considerably. If he had accepted our earlier Amendments, this would have been the best Coal Bill ever to come out of the House of Commons. We are proud of that, but we are disappointed that so far the Minister has not seen fit to accept any Amendment. I hope that he will accept this. If he does, he will receive the support of every hon. Member.

Mr. G. Elfed Davies: The Minister would be well advised to accept the Amendment which seeks to do what the Minister said earlier it was his intention to do—to consult the National Union of Mineworkers and the Coal Board on the problems of presenting a scheme. The scheme is obviously complex, but I would rather that my right hon. Friend's hands were not tied to a figure at this juncture before his consultations with the two sides of the industry. It would be in everyone's interests to have a scheme acceptable to both sides of industry and that will not be possible if this provision remains in the Bill.
This is one Amendment which my right hon. Friend could accept without any difficulty. He could then have the consultations of which he has spoken and then bring forward his regulations.

Mr. McGuire: I support the eloquent argument of my hon. Friend the Member for Bedwellty (Mr. Finch). The Minister should accept the Amendment, first, for humane reasons and, secondly, because history supports any scheme of this kind. The humane ground is that it is now generally recognised that the Government should give benefits to those

whose health has been broken on the wheel of industry, as is certainly true of men in mining. There are in the industry men who were disabled long before the age of 55 when they could have obtained some benefit from these proposals.
We have men who were disabled long before that time. It is generally recognised that the mining industry, which is now to be run down, has given its disabled men a measure of shelter and protection. Although I accept what the Minister has said earlier about the Government propping up the industry, change is being enforced. The mining industry has looked after these men carefully and to a far higher degree than other industries has kept men in sheltered occupations in lamp shops, powder magazines and that type of job, limited though these possibilities are.
The Coal Board employs well above the 4 per cent of these men, which is generally accepted as the average, and there is more than that percentage on the books of practically every colliery. Every branch secretary, as I did when I was a branch secretary, has a list of men longing for the day when they could get one of these sheltered jobs, so this problem will be exaggerated when we close pits.
Special consideration must be given to men who are not as free to sell their labour on the market as men under 55, who are physically fit. Historically, the main commitment is to men who have lost their health in war or peace. A man who is suffering from industrial injury or disease receives more benefits than a man who is merely ill, although it may be that the latter has greater disability than the man with industrial injury.
The National Union of Mineworkers is not Luddite. If the Minister accepts this Amendment, we shall be able to point out to the union that the age limit for fit men is 55, but we are now considering reasons to reduce that age and when the Minister meets the union he will be able to discuss with them at what earlier age the benefit should start, or whether there should be any age barrier at all, for men to receive payment on health grounds. If a man is not able to travel, his sheltered occupation may be gone. I think that the Committee will


support the Minister if he agrees to this Amendment.

3.45 a.m.

Mr. Eadie: I support the Amendment. I know that at 4 o'clock in the morning it is probably difficult to put forward logical argument, but I am sure that the Minister must be impressed by the arguments put forward by my hon. Friends.
I say right away that when one examines this Clause of the Bill one can only say that the actual concept is right. Indeed, it depicts a certain amount of humanity and understanding for a problem. Yet, having said that, it is a very depressing philosophy. The interpretation of this part of the Bill is depressing to the extent that it creates the impression that we are writing off men at 55 years of age and over. Therefore, although we can pay tribute to my right hon. Friend for the compassion that he has shown to a very difficult problem, nevertheless I think that he would agree with me that if something was done to amend this Clause along the lines proposed by my hon. Friends, it would introduce more compassion into the Bill and at least do away with this very depressing idea that we are writing off men at 55 years of age.
When we talk like this we are, to some extent, probably doing my right hon. Friend a gross injustice. I do not think that this was the idea in his mind when the Clause was being drafted, but he will see, from the arguments which have been advanced, that there are gross weaknesses in this Clause.
Some of my hon. Friends have already pointed out that certain anomalous circumstances can arise in relation to the calculation of 90 per cent. of a man's earnings. Surely we have to consider here the issue of retrospection, because we know that when pits are about to close, sometimes internally within the pits there is general readjustment or regrading of manpower. Therefore, we have to consider this question of retrospection.
In conclusion, I appeal to my right hon. Friend to take the sound advice offered to him. Surely there is here a margin for negotiation—I do not say consultation—between him and the National Union of Mineworkers. The reason why I do not say "consultation" is because I am

always reminded of the fact, when I was an active trade unionist, that when we started to use the word "consultation" we were always told that did not mean management, so I am often afraid to use that word.
I hope that my right hon. Friend will accept the propositions put forward by my hon. Friends and enter into the spirit of negotiation with the National Union of Mineworkers. I believe that if the terms of the Amendment were implemented it would give new heart and, to some extent, new morale to the industry and would remove this depressing philosophy that we are trying to write off men at 55 years of age and over. I hope that he will accept the Amendment.

Mr. Marsh: My hon. Friend the Member for Midlothian (Mr. Eadie) has spoken eloquently about the problems and anomalies raised by this particular scheme. Obviously, in a scheme of this sort anomalies are bound to arise. We will find an argument for having a finite date on this, but we shall find a lot more anomalies, whatever scheme is introduced.
I understand and appreciate what my hon. Friend the Member for Midlothian said, but I do not subscribe to the idea that we are writing off men at 55 years of age. We are recognising that some of them do take a long time to get another job; that some do not get another job, and that some of them, given a year or even two years, do eventually get another job, although it is difficult for them. The purpose of the exercise is to assist them during the time when they are waiting for other jobs. I recognise that in any scheme of this sort there must be a number of anomalies.
My hon. Friend the Member for Bedwellty (Mr. Finch) has spoken on the subject of industrial injuries benefits and their relationship to this scheme. This is a subject of which he has made a close study. I do not say that there is not a problem here, but I do not think that a coal Bill is the way to deal with it. One might want to look at the problem of industrial injuries benefits. I am not saying whether there is a case or not, but I do not think it is specifically a subject to be dealt with under a coal Bill.
Now that I have heard my hon. Friend's speech I understand why the Amendment has been put forward, but


I was surprised when I saw it. I ask my hon. Friends not to press the Amendment, because if it were accepted it would emasculate the whole scheme. It would, as my hon. Friend says, remove the commitment, but it would remove virtually the whole scheme, because it would merely leave the reference,
become redundant within the meaning of the scheme.
The problem here—and it is a very real one—is that at the moment there are about 2,500 redundant miners waiting for benefits under this scheme. If we were to accept the Amendment, which has been put forward for reasons which I understand, we would throw the whole thing back into the melting pot. For reasons which the House knows, the Bill has to go through by Christmas to provide benefits—

Mr. Finch: My right hon. Friend says that if the Amendment is accepted it means putting off the whole scheme. We are not trying to put off the scheme. We could bring in the scheme, and then consult all concerned and bring in this proposal when we bring in the regulations.

Mr. Marsh: I am not disagreeing with my hon. Friend on this, but if we accept the Amendment we shall produce a situation in which, at the end of the day, the whole thing will be wide open, and we will be back to square one, with no scheme at all. The delay involved would be such as to cause serious difficulties for a large number of people who are waiting for benefits under the scheme as it is.
I am not making a debating point about the age of 55. I announced this in July of this year. I have had correspondence with the N.U.M. about it. I have met the Executive Committee, and the Economic Committee of the union. Having started work on the scheme in July, and having discussed it on the basis set out in the Bill since then, to stop it in December and to go back to square one would, I think, not be in the interests of a large number of people who stand to benefit from it as it stands.

Mr. Finch: Will my right hon. Friend agree to give special consideration to disabled men who are declared redundant?

Mr. Marsh: I was about to refer to the fact that my hon. Friend had raised the question of disabled men who were made redundant. From what I have heard, I would not have thought that this was a particular problem, and one to be dealt with in a coal Bill. I am not saying that there is no problem here, but it is not a coal Bill problem. I shall read with interest what my hon. Friend said, to see how far the problem exists, and what we can do to try to meet it. But to throw the whole scheme wide open at this stage, so that all the Bill says is that there will be a scheme, would be to place us all at a very real disadvantage, particularly in view of the time which has passed. I hope, therefore, that my hon. Friends will feel able not to press the matter.

Mr. Mendelson: I accept what my right hon. Friend said about his discussions with the N.U.M., and the need not to be left in the position that he has to start all over again, but does he agree that because of the accelerated proposed closure of pits, the problem to which my hon. Friend the Member for Bedwellty (Mr. Finch) referred, that of disabled people under 55, will be aggravated, and it will, therefore, be necessary for him to take special action to help them? If he agrees with that, it will help.

Mr. Marsh: I am not word shaving. I said that my hon. Friend had raised a specific problem. What I will undertake to do is to look at what has been said on this—without any commitment because I cannot make a commitment—and see how far there is a case for assistance, and, if a case is made out, how best one deals with it. Certainly, I am open to continue to discuss anything outside the basis of the Bill with any of my hon. Friends.

Mr. Finch: In view of the assurance given by my right hon. Friend—

The Deputy Chairman: Mr. Ridley.

Mr. Swain: Before my right hon. Friend sits down—

The Deputy Chairman: Order. I had already called Mr. Ridley.

Mr. Ridley: The Minister, when replying to the earlier debate, answered the question why this scheme should apply to miners alone with the very true and telling answer that these are the only


people who have the semi-disablement which makes it extremely difficult for them to find other work from the age of 55 upwards, or perhaps even younger.
But if this is so, I think that the hon. Member for Bedwellty (Mr. Finch) makes a strong case, because he is arguing that it is not really the fact that they are 55 years or older which gives them the specially difficult circumstances, but the fact that they suffer from a semi-disablement which makes it almost impossible for them to find other forms of employment.
As the hon. Member for Derbyshire, North-East (Mr. Swain) said, there are a very large number of them and the problem is particularly pressing in the coal industry. There are 101,000 over 55, and this is clearly a major coal industry problem with which I think we all have the greatest sympathy. The difficulty here is that the Minister appears to be trying to solve the problem by means of age whereas the real solution may well be through development of the industrial injuries scheme.
We are, I think, giving away a very big principle if we are going to say that people over 55 in industries which are damaging to health and risky are eligible for special pensions. We have to ask ourselves what other people will come up with similar cases. The potteries, the rubber industries and others will produce strong arguments which it will be difficult to resist on these grounds, whereas if we based our scheme on industrial injuries then quite clearly industrial injuries can be made to apply for everybody. It might be wiser to look again at this and make sure that this would not be a better way of doing it rather than by a particular age.

Mr. Marsh: The hon. Gentleman will agree, of course, that if we were to do it this way then clearly we could not do it under this Bill. We would find ourselves, if his arguments were accepted, amending some part of the industrial injuries legislation, but it certainly could not be done in this Bill.

Mr. Ridley: Yes, but this is what the Committee stage is for. It is to make sure that we get these answers right. The Minister, in his last intervention, seemed to suggest that there is some force in

what I am saying and what his hon. Friend said, and it is only by debating and arguing these things that we find where the truth lies.
I do not claim to know a lot about industrial injuries benefit and disablement provisions, but this may be a point which requires further consideration. If this is not the right Bill in which to do it, then I think that a Bill with such unanimously supported objectives would be one the Government would find little difficulty in getting through if that was the better way of doing it.
To clinch my argument, the hon. Member for Fife, West (Mr. William Hamilton), in the Second Reading debate, said this:
It is not human to say to a man aged 55, 'We will give you a big percentage of your take-home pay for three years and, at the end of that time, you will get a £1 a week miner's pension.' That does not add to the dignity of these men".—[OFFICIAL REPORT, 28th November. 1967; Vol. 755, c. 365.]
4.0 a.m.
Indeed it does not. If we pay a pension only for three years at 58, 59 or 60, they will come off support and go back to the £1 a week miners' pension for five, six or, in the extreme case, seven years before they receive the retirement pension. If they do not find jobs, it will be a very lean six or seven years, especially after those three years on a relatively good wage, when their opportunities might have been greater because they were younger. This makes one wonder whether this is the right solution. If they are disabled, that would tend to get worse as they move towards retirement.
For all these reasons, I have some doubts about the wisdom of the scheme and cannot support the Amendment because it leaves far too wide an opening. The Minister would be well advised to think again. I assure him that there will be no difficulty from this side if special legislation were thought preferable to this course.

Mr. Swain: I apologise for speaking again. My right hon. Friend said that he had discussed the scheme with my friends the National Union of Mineworkers, but did not tell us its observations. I have a copy of them which says:
Our general view on the redundancy scheme would be that it should apply to everybody


made redundant as the result, directly or indirectly, of pit closures. It should also apply to such people until such time as they obtain new employment or retire and receive retirement pension from the State.
At the very least, the scheme should be applicable to all those made redundant over age 50 and all those disabled men who are made redundant, whatever their age. This is a second best proposal because it involves the drawing of an arbitrary dividing line between those who should qualify for benefits and others who may need them but will not qualify.
It goes on to say that some details of the Minister's proposed scheme need clarification and I suggest that we have not had that yet.

It then continues:

"(a) the scheme must apply to staff grades;
(b) how is the income of a redundant person to be calculated? Can it be made clear that it will include payments in lieu of all customary benefits forfeited by redundancy (e.g. concessionary coal)?
(c) can it also be made clear that payment under the scheme will not be reduced because a man is receiving disablement benefits, Special Hardship Allowance or any other payment made to him by reason of injury, sickness, disability etc.?
(d) the miners have been in a very disadvantageous position with regard to the Redundancy Payments Act simply because of the multiple-unit nature of the industry. Men made redundant at one pit have been refused a payment under the Act if they have been offered jobs at other pits which have been deemed to be (but, in our opinion, were not) suitable alternative employment. Can we have an assurance that this kind of thing will not happen under the new scheme (further details of how the Redundancy Payments Act has operated adversely as far as miners are concerned are available if required)?
(e) The scheme should not end in March, 1971. It should be a permanent scheme."

They are the observations of my union and I shall be interested to hear the Minister's comments on them.

Mr. Marsh: I listened with interest to the remarks of my hon. Friend the Member for Derbyshire, North-East (Mr. Swain). I made it clear earlier that we had discussed why we had decided that the scheme should end in 1971, because of the general context of the Bill. The points which he raised are the very ones which I said earlier would he contained in regulations which will be discussed with the union before being brought before the House.
As for the age at which the benefits will apply—and I do not want to get involved in an argument with the union—the scheme has been known in this form since 18th July. I have spoken with the Executive and with the Economic Committee of the N.U.M. and, to the best of my knowledge, I have not, until now, received any communication to the effect that the scheme was in dispute on this basis.

Mr. Eadie: My right hon. Friend keeps referring to "the scheme". On 18th July he did not propose a scheme, but put forward a series of proposals.

Mr. Marsh: I do not want to mince words. On 18th July, and ever since, I have talked in terms of a scheme which would make up a substantial proportion of average earnings of miners of 55 and above. Subsequent to that announcement, I was specifically asked by the N.U.M. about the date of operation of the scheme, in so far as it was in detail. As a result, I wrote:
Further to our telephone conversation of Friday, I can now confirm, as you requested, that the scheme affecting redundant mine workers aged 55 or more, which I mentioned in my speech in the debate on 18th July, should apply to those men affected by closures which took place on or after 18th July. As you know, the details have yet to be worked out.
I am not picking an argument with anyone, but only hoping to make the position clear. We are faced with a situation in which 2,500 men are already redundant, and have been for months, and to whom these benefits will apply. This is why I am prepared to discuss anything at any time, but I want this minimum scheme to go forward because people are waiting for the money. If we were to throw the whole thing back into the melting pot now, I do not believe that anyone would be pleased with the result.

Mr. Mendelson: I intervene now because we are discussing a point of great significance, particularly in view of what my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) said about the observations on disablement of the principal unions concerned. The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) was not correct when he pointed to the danger that might arise in all sorts of other industries.
It is within the knowledge of hon. Members of the Committee and, indeed, of the country as a whole, that the coal-mining industry is one where industrial disease and disablement have a much higher incidence. In foundries and one or two other places there is a high incidence, but none can compare with mining and although there have been many attempts to widen legislation on this point, there is a new element present tonight: and that is the accelerated closure of pits.
It is that which has led to the intervention of my hon. Friend. The Minister would be well advised to give consideration to it and not be influenced by any remarks to the effect that he would be giving away an important principle. This will involve a large number of men who will need to be looked after and the Minister would be doing the right thing if he accepted what my hon. Friend the Member for Bedwellty (Mr. Finch) has impressed upon him.

Mr. Finch: If my right hon. Friend will undertake to reconsider this matter of disablement, I will beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman: The Question is, That the Clause stand part of the Bill. Since the principle of the Clause has been adequately discussed within the terms of Standing Order No. 47, I propose to put the Question forthwith.

Mr. Ogden: On a point of order. May I point out that Amendment No. 12, standing in my name and the names of some of my hon. Friends raises an important point of principle, Mr. Irving?

The Deputy Chairman: That has not been selected in any case and cannot, therefore, be discussed.

Mr. Ogden: Not on the Question, That the Clause stand Part of the Bill?

The Deputy Chairman: No.

Mr. Ridley: The point of the hon. Gentleman's Amendment, which is a separate point, cannot be raised on the Question, That the Clause stand part of the Bill. But could not the hon. Member be allowed to raise his point, Mr.

Irving? We may not agree with it, but we should like to hear what it is.

The Deputy Chairman: It has been decided that that Amendment shall not be called.

Mr. Ogden: rose—

The Deputy Chairman: Order. I cannot have a discussion on a Ruling from the Chair under Standing Order No. 47.

Question put and agreed to.

Clause 3 ordered to stand part of the Bill.

Clause 4 ordered to stand part of the Bill.

Clause 5.

(REIMBURSEMENT OF LOSSES INCURRED BY THE NATIONAL COAL BOARD IN POST- PONING PIT CLOSURES.)

4.15 a.m.

Mr. Edward M. Taylor: I beg to move Amendment No. 19, in page 3, line 36, leave out '£5,000,000' and insert '£3,000,000'.
I understand that we are also discussing Amendment No. 20, in line 36, leave out £5,000,000 and insert £7,000,000; and Amendment No. 21, leave out from £5,000,000 to end of line 37.
This Amendment has attracted considerable interest and four of my hon. Friends have supported it although I am, unfortunately, the only one of our number left in the Committee. It is also unfortunate that we are discussing matters of such importance at this hour. My four hon. Friends were very anxious to talk about this Amendment—[HON. MEMBERS: "Where are they?"]—but I think that it is a remarkable demonstration of their confidence in me that they have asked me to deal with it in their stead.
One of the reasons for the late discussion of this Amendment is that the Government insist on going on with business after other business taken under Standing Order No. 9. Such a practice might even discourage hon. Members from going ahead with requests for debates under that Standing Order, and that, I think, would be unfortunate.
If I could have an agreement in principle on this Amendment, I would be prepared to withdraw it. First, is the idea of providing a sum of not more than


£5 million or not exceeding £8 million to keep open uneconomic pits for a brief period? If so, I suggest for two main reasons that to use the money in this way is rather foolish. In the first place, to keep open pits when there is no demand for the coal produced from them will just add to existing stocks, which are and have been increasing. While to do this might help us over a temporary unemployment problem, to have stocks more substantial that we have at present would make it even more difficult for future Ministers and future members of the Coal Board to justify a situation in which production was even approaching demand. That would be merely to hand over today's problem to the men who will follow on in the future. It is unfair to the industry in the future.
Second, is this the best way to serve the coal mining industry and the miners? The very substantial sum involved could more properly be used for investment in alternative industries that could provide real and secure employment in the long term—real job opportunities. That would be a more effective way of spending the money.
But some hon. Members on this side feel that perhaps this Clause is simply, in writing and in this Bill, the pay-off for a rather squalid deal which appears to have been negotiated at a recent Labour Party conference at a very crucial moment—particularly in relation to the votes of the National Union of Mineworkers—that 16 pits would be kept open for an additional six months. If this Clause really does represent the pay-off for that rather squalid political bribe, it should not be in the Bill at all.
I must say that I have been rather impressed by the statesmanlike way in which the Minister of Power and the Parliamentary Secretary have been facing the problems of the power industry. They have had to make harsh and real decisions which affect people in their ordinary lives, and to that extent this kind of blatant Prime Ministerial interference will not help them. In the circumstances, the Minister may be glad to consider the Amendment and, indeed, to accept it.

Mr. Ogden: In the doubts put forward by the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) there was some imputation of corruption. His

Amendment would reduce the sum from £5 million to £3 million, but our Amendment No. 20, which has not been selected, would do just the opposite: instead of reducing the sum, we would increase it from £5 million to £7 million. We suggest this because every other forecast of production targets and colliery closures has been over optimistic. We suggest that at a time when the closure programme has been accelerated it would do no harm at all to have an insurance over and above the figures already in the Bill.
These are the reasons why my hon. Friends and I support Amendment No. 20. There is a further reason which I should like to have expanded under Clause 3 to give an indication why the amount should be increased from 5 million to £7 million. When we talk of miners we think of strong men with broad shoulders, like my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) and my hon. Friend the Member for Ince (Mr. McGuire), or even of small wiry men like my hon. Friend the Member for Abertillery (Mr. Clifford Williams). We tend to forget that men and women in the ancillary services will he affected by closures.
Colliery managers, colliers, surface workers and coal face workers would produce little coal if they did not have the full support of men and women in the ancillary services and the machinery of the Coal Board. When closing pits we should not forget that we shall lose the support of area boards and administrative offices. This is why the sum should be increased from £5 million to £7 million. We should think of those who pay the wages, provide training services, order pit props and conveyers—the tools of the trade—those who do the planning, provide baths, canteens, supervise workshops and repair plant and take care of the thousand and one things that have to be done to make this coal industry the largest and most efficient in Europe.
The productivity of the white collar workers is as high, if not higher than, that of any private enterprise. The N.C.B. is a complicated organisation. It was created to control 1,000 collieries and ancillary services on vesting date. Now it has the task, 20 years later, of reorganising the administrative control of 300 or 400 collieries in 17 or 18 areas


with a hot line link to the London headquarters and the amputation of divisional headquarters. This is link control with a vengeance, a drastic project which may place a tremendous strain upon the headquarters structure. There is a danger that services and controls close to the collieries will be deployed directly under the control of the London headquarters.
I understand that the N.C.B. estimates that the new organisation, linked with redundancies caused by colliery closures over the next few years will effect a reduction of 13,000 non-industrial staff by 1970. At present, non-industrial staff numbers 47,000, of whom 27,000 are in junior grades. There is the closest co-operation between industrial and non-industrial grades in the supervisory staff through the whole structure of the Board's organisation.
This is not the first time the staff has met such a challenge of reorganisation. It has had a mechanisation and computerisation programme of infinite complexity and detail. People in the white collar grades have served the industry well and they deserve the extra support which could be provided by putting the extra £2 million in the Bill.
May I say a personal word of thanks to you, Mr. Irving, for allowing me to put in this form what I could not put in another form earlier in the debate.

Mr. Concannon: I support the Amendment, and should like to go a little further, for the philosophy behind it is very good. I should like to see more phasing of pit closures until suitable alternative employment is available, with an open-ended commitment by the Government instead of the £5 million.
I represent a receiving area for some of the older employment areas and older mining regions. My area is more modern than those of many hon. Members who have spoken before, and we are still short of miners—though I do not expect to fill the vacancies with mine workers of 55 and over. The older areas must be protected by the phasing of necessary colliery closures with the provision of suitable alternative employment, and, therefore, an open-ended commitment would be better.

Mr. Emery: I rise at this late hour just to put one or two questions to the Minister and to draw a number of conclusions. We are in rather a strange position, because in discussing both Amendments at the same time we are considering exactly opposite ends of the same point; one Amendment wishes to reduce and the other to increase the amount to be paid over a four-year period for keeping 16 pits open.
I understand the worry of the hon. Member for Liverpool, West Derby (Mr. Ogden) only too well when he said that in every forecast production figures have been overestimated. That is true, and I do not think that any hon. Member taking part in the debate would believe that the figures we have had are budgets, forecasts or estimates. They are really guesstimates, more often than not of the worst sort.
What really perturbs me about the Clause and the Amendment is that their purpose is to keep open inefficient pits which have already been scheduled for closure by the management. Paragraph 114 of the White Paper on Fuel Policy states:
In the light of an assessment of employment prospects this winter, the Government have requested the Board to defer until after the end of 1967 all closures except those necessitated by the exhaustion of reserves.
Later in the paragraph it is stated for the first time that the Government consider that the management of the Coal Board should consult on pit closures to a very much greater extent than before with the chairmen of the regional economic planning councils. Whether this was policy or not, it is certainly the first time that I have seen this limitation put on the management authority of the chairman of the Board. Is it the Minister's intention that there should be this extra limitation, and if this is the case then I think that Lord Robens has the right to be told about it. I am certain that he does not think that it is.
The policy on closures is set out quite clearly in paragraph 117 of the White Paper. It would appear quite definitely that the two contentions are that this should not be done in haste and that it should not have any wrong or unplanned effect on the pit closure programme. The Government surely cannot claim that either of these two contentions are reasons for keeping pits open and are applicable to the Clause we are considering.
It is for that reason that I believe my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) was right in suggesting that the amount of money should be cut down. It was the policy of the Board that the pits should have been closed earlier. They were co-ordinated into the plans and management decisions. One has to look a little further for the exact reason for finding this Clause in a coal borrowing powers Bill.

4.30 a.m.

Mr. Edwin Wainwright: Is the hon. Member suggesting, regardless of whether jobs are available for these men, the pits should be closed, throwing the men out of work?

Mr. Emery: I am not suggesting it. This is what the Coal Board has said. I am not taking on this responsibility. This was something planned with and agreed by the Minister. This is the strange thing about it.
I come to the point my hon. Friend the Member for Cathcart made. This was a political deal. I do not wish to use the word "bribe", but I do not think that it is too far away. The position is that hon. Members who are members of the N.U.M. made their power felt at a certain conference. They were rightly concerned. I am not doubting that. They had a vested interest and the interests of their members to look after. They were concerned about pit closures and the Prime Minister and other people were concerned about the way the N.U.M. might vote on a certain resolution.

Mr. Swain: On a point of order, Mr. Irving. Is the hon. Member suggesting that the Prime Minister used roguery or treachery? Is he impugning the Prime Minister's character in the action he took immediately prior to the conference at Scarborough?

The Deputy Chairman: I had not taken the remarks in that way. I am sure that the hon. Member will clarify the point.

Mr. Emery: Indeed I will, Mr. Irving. There are a number of instances where the charge of roguery can be brought against certain people. That was not what I was implying. I was saying that the Prime Minister wanted a deal. Any

hon. Member in this Committee who does not believe that this sort of thing happens at trade union conferences and at party conferences many times is living in another world.

Mr. McGuire: The Tory party conference does not vote at all.

Mr. Emery: We do not have the block vote, so we are not affected by this. I invite the hon. Gentleman to the next Tory Party conference. He is talking without knowledge or experience.

Mr. McGuire: It is a proud boast that the Tory Party conference does not vote. Indeed, Tories are aghast when anyone seeks to vote at their conference. I believe that the vote at the last conference was the first for many years. It is not a feature of Tory Party conferences to have votes.

The Deputy Chairman: Order. There is no mention of the Tory Party conference in the Amendment. I hope that the Committee will come back to the Amendment.

Mr. Emery: I realise that only too well, Mr. Irving. Perhaps I have missed out by not having an Amendment put down on that matter. I wanted just to clear up a point, since what the hon. Gentleman has said is incorrect, as he knows. However, it is fun, even at this hour—perhaps it is more acceptable at this hour.
But it is the case, as he knows, that the announcement of the prolongation of the life of these 16 pits was made when the vote of the N.U.M. was most needed. Certainly, there was managerial reason. However, another reason is probably that the Government's management of the economy was so poor that there was heavy unemployment, so this is an even greater condemnation of the Prime Minister in his interference.

The Deputy Chairman: Order. It is not for the Chair to decide on that issue, but the hon. Gentleman cannot elaborate on the matter on this Amendment.

Mr. Emery: I shall come back to the Amendment, Mr. Irving. I am sorry that I have not made myself clear.
We are concerned about the way in which the management of the coal industry has been interfered with. We


cannot see any argument for keeping open pits which had been properly planned and scheduled for closure. The Clause allows this sort of interference to go on and the Amendment tries to impose a time limit on such interference. It would surely seem plain that the amount of money involved here is to be such as to carry the cost of these 16 pits for four years. Indeed, the hon. Member for Derbyshire, North-east (Mr. Swain) put down an Amendment which would have entailed even greater cost over an even longer time. We cannot project that the period should be as long as the Government propose. It cannot be in the interest of proper management or of the industry as a whole. Surely we all want to see the retraining of miners made redundant carried through as quickly as possible. Delay in that is bad for the industry and the prospects of the men.

Mr. Swain: Before making speeches from the Front Bench opposite the hon. Member for Honiton (Mr. Emery) should do a little homework. If he had read the statements made here and elsewhere, he would have known that the 16 pits will close during the next 12 months and not in the next four years, or four years from now, as he suggests.

Mr. Emery: I assure the hon. Member that before I get up to make any speech, wherever it is, I do my homework. The hon. Member is right. Postponement is until the end of March, but the cost factor, and the cost factor involved by the Clause, runs to between £5 million and £8 million. We believe that that is too much to pay, particularly when it is not money which the Coal Board initially expected to meet in its pit closure programme. That sums up the position. We are sustaining uneconomic pits, and it is wrong to do so.

Mr. Edwin Wainwright: Speeches of the kind just made by the hon. Member for Honiton (Mr. Emery) make some of us believe that it is Tory policy to make sure that pits close regardless of the impact on the men. The hon. Member has made a statement about the cost of not closing the pits. No one says that the cost will be £5 million or even £8 million. We do not as yet know. No one knows how long they will be kept open, but my hon. Friend the Member for Derbyshire, North-East (Mr.

Swain) was correct in saying that they will probably be closed within 12 months.
The Coal Board has all along tried to phase the closing of pits to avoid greatest harm for the men. That is the easiest way to ensure that the welfare of the men is cared for. The hon. Member for Honiton criticises the Government, however, for having second thoughts and deciding to grant the money to enable the Coal Board to phase its closures. Some of us on this side want a greater phasing out.
It does not behove the hon. Member to score party points on an issue of this kind. As I said earlier, the welfare of the men is involved. They can be thrown out of work willy-nilly. It will be impossible for the Coal Board to make certain that jobs are provided at other collieries or elsewhere in the same area unless more time is given. I was surprised at the hon. Member's attitude. I hope that he will realise that it is the welfare of the men and their future which matters. They have given long service in an arduous and dangerous job in the mining industry and they should be looked after better than the impression which the hon. Member has given.

Mr. Freeson: The point of Amendment No. 20, put forward by my hon. Friend the Member for Derbyshire, North-East (Mr. Swain), would be to increase the initial limit from £5 million to £7 million to meet the Board's losses on deferment of colliery closures. It would not affect the maximum provision of £8 million to which the sum may be raised by order.
The purpose of the Amendment is already accomplished implicitly in the Bill. If further moneys need to be made available, my right hon. Friend the Minister has power to place the necessary Order and get approval. Therefore, although I recognise the point of my hon. Friends in wanting to speak to this issue, it is not necessary to press the Amendment, because my right hon. Friend already has power under the Clause to deal with the question which it raises.
4.45 a.m.
I want to turn my remarks in the main to those of Members of the Opposition. Of the two Amendments in their names the first would have the effect of reducing


the financial provision to £3 million, and the second would exclude the power of the Minister to increase the provision by order to the £8 million to which I was referring just now.
The financial provision depends primarily on the estimate of likely costs of the current programme of deferments, and £3 million might not, on current estimates, be sufficient. What in effect hon. Members opposite would be doing, if they were to have their way, would be to impose on the N.C.B. additional expenditure. Whatever their views might be on the decision which was taken at the request of the Government, if the Amendment were carried the result would be to impose on the N.C.B. additional expenditure for action requested of the N.C.B. by the Government.
This is not new. I am merely stating what has been stated quite specifically and publicly before. I do not know why the hon. Member should look astonished at this. This would be running counter to the whole principle applicable to other aspects of the Bill and the policy which it represents. Where the Government are seeking to establish a policy which, for social and economic reasons, and on national grounds, the nationalised boards undertake, the cost of the policy should be carried on public funds; that is clearly shown to be the position. Were the Amendment of hon. Members opposite to be accepted the action which would result would run counter to such policy, which is in accordance with our policy in this Bill.
However, I want to turn to one or two points which were raised by the hon. Member for Honiton (Mr. Emery). He raised the question of consultation with regional councils' chairmen, which was referred to in the White Paper. I got the impression from his remarks that this came as some fresh item of news to him. It is not a fresh item of news. It was stated publicly, before the White Paper was published, that this was to be the policy in regard to closures. This is one of the reasons why it is necessary to have the power to raise the sum to £8 million if necessary at a later date, because while it may be sound policy—and there is no question that it is sound policy—for the Board to pursue a particular closure programme, it does not follow that that particular order of closures in particular

development areas and regions would be the right one to follow through. It is for this reason that the policy of establishing close liaison with the regional councils has now been put forward by the Government and is operative.
This might well create situations in future—it might—where the order of closures which in particular areas the N.C.B. had established, some time back, perhaps, or currently, would be sought to be varied by the regional councils in the light of particular regional circumstances applying to them at that time. If the N.C.B. were to co-operate in this broad economic approach, this might impose on the Board, for the economic and social benefit of a region as a whole, additional expenditure which it would be unreasonable to impose upon the Board, just as it has been unreasonable to impose upon the N.C.B. the cost of closures requested by the Government for this winter.

Mr. Emery: I thank the hon. Gentleman for giving way. Would he clear up a direct question I asked him? Who has the final decision? Is this decision, in other words, being left with the N.C.B.? Or, if not with it, with whom? Because interfering with management at that stage is very dangerous indeed.

Mr. Freeson: The operative word is "consultation". The decision does rest with the N.C.B., but it is not an empty exercise, but a proper and sound procedure in the light of regional needs. I hope that we have every hon. Member of the Committee in support of such liaison where we have serious regional problems current in this industry, in areas of unemployment higher than in other parts of the country.
The point which I am making is that, for the same reasons as we are seeking to establish for this winter's deferments, it would be wrong to put these costs, which are the result of national or regional economic and social policy, on the Coal Board. The comments of the hon. Member for Honiton about the decision about the winter deferments were unnecessary and unworthy.

Mr. Emery: They were quite true.

Mr. Freeson: They arose from an unemployment situation, which is not something to be made into party capital.


There are serious problems in these areas. If the hon. Gentleman wants to follow the logic of what he has been implying, one can only assume that he wants to see a continuation of miners being put out of work in areas where there are already serious problems of unemployment. Again, I must tell the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) that this is not a joking matter. Thousands of men and serious unemployment problems are involved.

Mr. Ridley: Does the hon. Gentleman think that it is a joking matter that the fortunes of these miners should be played with so that the political opportunities of the Prime Minister can be enhanced thereby?

Mr. Freeson: The hon. Gentleman is continuing to play this way and to turn a serious situation into a light-hearted political joke. I have explained why these winter deferments were absolutely necessary. If the hon. Gentleman wants to make party political capital out of it, that is his business. There were sound reasons for this policy, just as there are sound reasons for seeking to establish this close liaison at regional level wherever there is a programme of closures. I hope that I shall always have the support of hon. Members in trying to improve a regional situation where unemployment threatens.

Mr. David Lane: Can the hon. Gentleman confirm or deny a report in The Times that the Minister of Power was not in agreement with the Prime Minister's proposal to defer these closures?

Mr. Freeson: I can confirm that that is not correct.

Mr. Edward M. Taylor: Although it has not been entirely satisfactory, the Parliamentary Secretary's explanation has shown that the Coal Board would suffer a substantial financial loss if the Amendment were accepted and in those circumstances I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

Clause 6.

(REIMBURSEMENT OF ADDITIONAL COST OF USING COAL IN GENERATING ELEC TRICITY OR PRODUCING GAS.)

Mr. J. H. Osborn: I beg to move Amendment No. 24, in page 4, line 5, leave out:
'or any area gas board'.
This is a probing Amendment which, I understand, we are taking with Amendment No. 29, in page 4, line 9, leave out "or producing gas".
The Clause provides £45 million for reimbursing the additional cost of using coal to generate electricity or produce gas, and I want to deal particularly with the latter. Is it logical to provide this money to distort the developments now taking place in the gas industry? I have before me the Annual Report and Accounts of the Gas Council, produced in July, this year. On page 6, there is a very good description of the development of natural gas, particularly in Sheffield, where 50 million cubic feet a day went into the national system completed in 1964 for Algerian gas.
In the very comprehensive review of the fuels for producing gas, it is shown that total consumption of coal for all purposes last year was 16 million tons, compared with 17½ million tons and in the Annual Report of The Gas Council, on page 11, there is a review of sources of gas, and particular reference to the uses of oil by modern gas-making techniques which are also outlined in that section of the Report. For instance, the quantity of oil used for gas making in 1965–66 was 2,529,000 tons and in the following year, last year, was approximately 3,492,000 tons. This is the background of the development made by the Gas Council which has been revealed as very able.
In the White Paper on Fuel Policy, on page 5, there is the statement:
In recent years the traditional methods of making gas from coal have been rapidly superseded by oil-reforming processes and, by this year, planned gas production was about two-thirds from oil and only one-third from coal.
On pages 7 and 8, the development of natural gas is dealt with and paragraph 16 says:
Natural gas, produced and delivered on shore through sea-pipes by the producing companies, must be carried to the distribution networks.


It goes on to outline the extent to which the networks have developed and says, in paragraph 17:
Sales of town gas last year were equivalent to about 1,000 m.c.f.d. of natural gas.
On page 9, it says:
The Government's studies have suggested that the saving in resources from introducing natural gas is likely to be highest where it commands the greatest price premium.
This is a study of the techniques and economics of generating gas. Is it right, and, therefore, relevant, that a Clause of this type should so affect the policy of the Gas Council, not only of using gas produced from oil, but from natural gas? I hope that the Minister will answer this question: to what extent will this clause distort development of the gas industry and to what extent is it contrary to the cheap energy policy, hearing in mind that £45 million are involved? There could well be distortion of that development plan, admittedly for good reasons. We have had debates on electricity with which I am not dealing, where there might be a good case for allowing distortion but we must be told to what extent development will be distorted by this Clause.
I propose the Amendment at this hour by way of question and look forward to the Minister's comments.

5.0 a.m.

Mr. Edward M. Taylor: I and other Scottish hon. Members have expressed concern that the price of gas in Scotland is 24 per cent. above the average for England and Wales. I and others support this Amendment because we are a little concerned that if gas is included it could adversely affect the Scottish position. The Scottish Gas Board uses a great deal of coal. The increase in the price of coal last year, according to the Board's Annual Report, cost it £300,000. I am told that the reason is that, for social reasons and to support the industry, the Scottish Gas Board has given preference to coal. If we have done this off our own bat in Scotland, and if, because of this particular clause, the other area boards will put an emphasis on coal and will get the extra pay for it, this appalling differential of 24 per cent. could become even worse.
I want an assurance that people in Scotland, who already pay a quarter more

for gas, will not have to pay an even larger differential.

Mr. McGuire: I wish to speak to this Amendment because the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) said that it was in the nature of a probing Amendment. I think that by that he meant to try to find out how much coal the Gas Board would take which it would not take if left to its own devices.
When my right hon. Friend introduced this conception of making the gas and electricity boards take extra coal in the July debate, I think I am right in saying that the figure he mentioned was an extra 300,000 tons to help the mining industry in this period of consolidation. I want to know whether it is, in fact, that figure or a much higher figure. I hope that it is a higher figure, because, although I have criticisms of the C.E.G.B., which I have made before, I certainly have some criticisms of the Gas Board.
First, I think that its estimates of the amount of gas that it has to sell to treble the existing sales in the very short period of time mentioned in the White Paper are absolutely fantastic. I do not see how the market will absorb it. If it is not to be absorbed in the market, but in the power stations, then it will displace even more coal. Therefore, we should look carefully at this matter.
There is another reason why I think that the Gas Board owes a debt to the coal industry. I am not saying that in the context of producing cheap gas it is not right, but the trouble is that we have never had a co-ordinated energy policy. We have had each corner of the energy market fighting for its own share, but no part of the energy market has run away from its commitment to coal as fast as the gas industry did.
Goodness knows, we have heard enough talk last night and this morning about optimistic forecasts of coal to be taken by various sectors of the energy market—we have heard ad nauseam how wrong and optimistic they were—but if one looks at the forecasts made years ago, whether in the so-called Ridley Report or in the general estimates, of 250 million tons coal production in the period 1965–67, contained in those reports—and hon. Members will be able to check this—the requirements of the gas industry were put at a figure of about 27 million


tons now and going up to about 31 million tons. The coal industry planned for this kind of requirement, and, because the gas industry requires a special type of coal, a huge investment was made to satisfy these forward estimates.
We all know the history now. We have had the methane out of the Sahara and we have had this new bonanza of the North Sea gas. I cannot understand why we should be going mad to get rid of what I consider to be a valuable asset as quickly as we can, not in the nation's interest, but in the interests of the people who say, "The quicker we take the gas out the less you pay for it". The price has not yet been determined. During my Second Reading speech—and this was reported in The Times of 21st November—I forecast that the oil companies who control the gas head would demand a higher sterling price because of devaluation. We can assume that the estimates of cheap gas based on a price of 2½d. a therm landed ashore will be a little bit out, and that it will be dearer than that, and after adding the conversion costs it will be dearer still. Thus, this bonanza which everybody seems hell-bent on dissipating as soon as possible might not be the bonanza that people think it will be.
How much of the £45 million will go to the gas boards, and how much will go to the C.E.G.B.? If we can get some answers to these questions we will have a better idea of the extent to which the market is being distorted to help the coal industry.
The gas industry owes a debt to the coal industry, and if it helps out in a difficult period it will go some way to repay that debt.

Mr. Freeson: Perhaps I might start by referring to the question asked by the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn). The hon. Gentleman wanted to know what will be the effect on the future development of the gas industry. I do not think that it is possible to quantify in exact terms the effect of the additional coal burn which the gas industry is undertaking to assist the slowing down the rundown in the coal industry. It is so small compared with what the C.E.G.B. will be doing to help that it is not possible to give exact figures now. I am not necessarily quoting a figure to which my right hon. Friend has

previously referred, but in round figures it may be about 300,000 tons this year.
This must not be taken as a hard and fast figure. It is a very small figure in relation to the 6 million tons or more per year which will be burned additionally, chiefly by the C.E.G.B. It will be appreciated, therefore, that in terms of such a range, whether it be an accurate figure or not, there cannot be the slightest marginal effect on the future development of the gas industry.
What will happen is that in particular localities where plant might have been switched to oil consumption ahead of the advent of natural gas this will not now take place if it is practicable to keep to coal burning until the natural gas arrives. But the amount is so small that it will not affect the advent of natural gas, which is essential for the development of this industry in the years ahead.
The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor), in almost a traditional exercise, asked what would be the effect on Scottish gas prices. I do not blame the hon. Gentleman for raising this, but I had hoped that by now, from a study of the policy outlined in the White Paper, and reflected in the Bill, he would have appreciated that areas such as Scotland which have had to pay higher prices for fuel—the hon. Gentleman tends to exaggerate at times, but I do not blame him for that, either—will benefit to a degree from the policy being put forward, because the cost will be carried by the Exchequer when coal is being burned specifically to assist the coal industry, whether it be for electricity generation, or for the production of gas.
Any additional coal burn required by Government policy as outlined in the White Paper will be paid for by the general body of taxpayers, whereas until now that particular additional cost in the case of Scotland, or any other particular locality, has had to be carried by consumers. I hope this will at least make the hon. Member a little happier than he has been in the past, and satisfy a certain amount of doubt.
I have answered the points so far as I am able which were put to me by the hon. Member for Ince (Mr. McGuire). I have indicated the rough figure for the amount of additional coal the gas industry will be taking. As my right hon.


Friend the Minister said in the debate on 18th July, the electricity and gas industries have agreed to use additional coal. This was not a Government edict; it arose out of genuine consultation. The famous private conference at Selsdon Park was one such occasion when this matter was discussed at some length, and the Bill reflects the policy of assistance which the electricity and gas industries will be giving to coal, and in turn, the assistance being given by the Exchequer which will carry the additional cost involved.

Mr. Emery: May I, first, bring us back to what is the basic point of the Amendment, and, indeed, of the Clause itself. It is the extra coal burn which is being projected by the £45 million subsidy over this period. I am amazed. I had not believed that the amount the gas boards would be taking would be as low as 300,000 tons. I know that this had been rumoured, but it did seem to me that if the figure was as low as that—and the words of the Parliamentary Secretary were that this would have the smallest marginal I effect on the coal industry—the disruption this might well bring about for this very minute amount was something which might be the position; but it has been confirmed by the hon. Gentleman in answering the direct question.
May I suggest that we have again to realise that the matter comes back to the question whether it is right—particularly with this very small amount—to keep uneconomical pits open. That is really the position, and it allows me on that line—because the argument is equally the same on this Amendment as the other—to answer the point made by the hon. Member for Dearne Valley (Mr. Edwin Wainwright). I do not come to this Dispatch Box, and nor does any other hon. Member, without being highly and completely conversant with the human and social problems that closures mean. Nobody in the House ought to accuse anybody of not considering that. I do not believe that there is any hon. Gentleman who does not realise the immense problem that is involved.
But—and this is the important difference between soma of us—some people think that the ordinary miner will benefit from a fast rundown as opposed

to a slow rundown; and that is a quite basic matter which ought to be faced and is not, so far as this Amendment is concerned, faced at all.
I believe that the sooner those miners who it is established will be made redundant are retrained and are in new jobs, the better for them, the better for the mining industry and the better for the country. The better for them, because the younger they are in a new job the greater their chances of being able to settle down. They will not have reached 55, at which it will be more difficult to retrain them, and they will stand a better chance of having a new life. It will be better for the industry because it will be competitive if we use the most economic pits—

5.15 a.m.

Mr. Edwin Wainwright: When he talks of a rapid rundown, does the hon. Gentleman realise that it is very difficult to provide the jobs for the retrained men? He should remember that a Tory Government closed down many pits without help being provided. Those closed by this Government represent a responsibility of the Coal Board to find jobs for the men concerned.

Mr. Emery: I was trying not to make any political point. That rundown under the Conservative Government was greater than what we are discussing now, but there was no major unemployment in those areas above the national average. Once target figures for a rundown have been set, the faster that they can be achieved the better for everybody—the miner, the economy and the industry.
Something which particularly affects coalburn was raised by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), on Second Reading. He said, in column 385, that the spending of the £45 million was to get 10,000 more men in the pits in a year and that if the Clause were not passed, after the first year the rate of decline would go back. That is so, so if the Minister does his sum again he will find that the first year produces the extra 6 million tons and it is these same people who go on producing.
The Parliamentary Secretary must realise this, since he tried, in column 392, to contradict my hon. Friend. For the first year the rundown will decrease from


45,000 to 35,000, but from then on it will revert to the original level. This was my hon. Friend's clear point and no one should be in doubt. This is a marginal amount for the gas industry and I am sorry, because the trouble it has caused makes one think that it must be greater.
I am surprised that the Minister has felt it worth while to continue with a disruption in the gas industry for this small amount of tonnage. However, if he feels that it is essential, I would not urge my hon. Friends to divide on this matter.

Mr. J. H. Osborn: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Edward M. Taylor: I beg to move Amendment No. 33, in page 4, line 19, leave out '£45,000,000' and insert '£25,000,000'.
I will not detain the Committee because, having spoken to my fellow sponsors of the Amendment, I can sum up the case by asking two questions. I notice that the hon. Member for Liverpool, West Derby (Mr. Ogden) has assisted us again by suggesting in a later Amendment that £45 million should be deleted and £60 million inserted. My Amendment, on the other hand, would reduce the £45 million to £25 million.
The two questions are these. First, is it wise, when having such a new development and paying substantial amounts of money, to subsidise the use of coal in circumstances when it would not be used? In other words, is it wise to spend £45 million without Parliament having an opportunity to review the position in the interim? The Minister might take the view that if we were to reduce the amount to £25 million, the job could not be done because the money would run out.
When discussing previous Amendments we were told that certain amounts could be changed by Order, but I gather that that would not be possible under this Clause. If £25 million were inserted and the money ran out in, say, two years' time, could not the Minister approach Parliament for more? I suggest that it would be wise to devise a form of words which would enable Parliament to review

the progress made in the interim, and certainly before 1st November, 1971.
Secondly, we have tried to leave out the gas boards to prevent their modernisation plans from being disrupted. Our efforts have not proved fruitful. Will the right hon. Gentleman review the progress of this entirely new venture between now and 1st April, 1971?

Mr. Emery: We would like to have seen more direct control over this large sum of money, with Parliament having an opportunity to discuss the matter in the interim. Would the Minister be willing to make a statement in the House, or publish details in the OFFICIAL REPORT, to show when £25 million of the £45 million has been used up? If he will give that assurance I am sure that my hon. Friend would find it possible to withdraw the Amendment.

Mr. Freeson: I see no reason why this cannot be done. There is no reason why, by way of a Question at the appropriate time, a statement should not be made.
It might be helpful if I were to indicate the basis on which the figure of £45 million has been arrived at. It is based on the assumption of assistance at a rate of 6 million tons a year for a period of three years and eight months—a total of 22 million tons of additional coal use over the period. It is possible that this quantity may be increased, and that is why we have said, "six million tons or more." The quantity may also be affected by the availability of other fuels as it is not intended that the additional costs of using coal in place of other fuels expected to be, but not, in fact, available, will be eligible for reimbursement.
There is no precise estimate of cost per ton available at present, but it is presumed that £2 per ton will be sufficient. The actual cost at the margin will be higher than the average and the costs will themselves be affected by movements in the costs of the fuels displaced; for example, by the continuation or the removal of the 2d. a gallon Middle East war surcharge on fuel oil. The provision of £45 million is regarded as sufficient to cover a range of possible variations in costs per ton and in the quantity used over the period to March, 1971.

Mr. Edward M. Taylor: The hon. Gentleman has not said how we shall know when the £45 million figure has been reached, but he has tried to be most helpful and I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

Clause 7.

(INCREASE IN MEMBERSHIP OF THE NATIONAL COAL BOARD.)

Mr. Edward M. Taylor: I beg to move Amendment No. 34, in page 4, line 27, to leave out `sixteen' and insert `thirteen.'
One again, my hon. Friends have allowed me to put forward their views. The hour is very late and I want to be very brief. Unless there are really compelling reasons for increasing the membership of the Board at a time when we are discussing voluntary wastage, moving men around, and a loss of thousands of men a year, to say nothing of what can be described as a savage rundown in pits, I must say something on this Amendment.
The rundown is being intensified and it would appear to be utter folly for the Minister to suggest at such a time that there should be a major increase in the membership of the Board. There have been substantial developments calling for the attention of management, I agree; such as the new area structure which, on page 30 of the Annual Report is described as being largely self-sufficient for each area. Staff members have risen in one year by no fewer than 1,200 so it would seem that the areas are becoming more self-sufficient. It appears that the number of pits is being considerably reduced, and, while the problems will pose enormous amounts of work for management, would it really not be possible to carry on with the same numbers on the Board?
Our Amendment is modest. All we ask is that, instead of 16, as the Bill recommends, there should be 13 as a compromise. The Minister must be aware that some of us on this sic e of the Committee are suspicious and a little worried about the increasing amount of patronage available to the Government. I do not suggest that any member of the present

Board is not a gifted and enlightened man, but Ministers of the future might wish to take advantage of this enormous amount of patronage available for providing jobs for the boys. When we bear in mind the appointing of members to boards, committees, commissions, and so on which has been done by this Government, then I think we should be very careful before taking the proposed step.
Surely this is the worst possible time to increase the number of members of the Coal Board, but if the Minister will not accept our Amendment would he consider the very sensible proposal which we would make?

5.30 a.m.

Mr. Harold Neal: I do not intend to delay the Committee for long at this hour, but I would be failing in my duty if I did not express my direct opposition to the proposal in the Clause to increase from 11 to 16 the membership of the Board. After long and unique experience of the industry, including Ministerial experience, I cannot imagine why this proposal has been foisted on the Minister in this way.
More and more over the years the Board has been passing into the hands of people who know little about the industry, who have no practical experience of it, and no knowledge of it at all except through a railway carriage window. If the Clause proposed to put on the Board five practical miners I would cheerfully follow the Minister into the Division Lobby to support it, but the opposite is the case.
Someone in the Ministry or the Coal Board must have resurrected the Fleck Report—the Report of the Advisory Committee on Organisation—published in 1955. That Committee recommended that the Coal Board should be increased to 12 members but, in an addendum, Dr. Fleck, as he then was, suggested that the number should be increased to 18. I think that someone at the Ministry or the Coal Board has found that Report and has thought that it would be a nice proposal to put in the Bill.
I learned over the grapevine, however, that the five additional members—and I am open here to correction by the Minister—are to be the area chairmen of the new areas. They will be given national status. If that is the case, it means that those area chairmen will be commuting


between Glasgow and Cardiff, Edinburgh and Cardiff, and between Doncaster and Nottingham and London, attending Board meetings as well as carrying on their normal duties as area chairmen in the provinces. That is a derogatory proposal.
For years it has been the practice to call divisional chairmen to London to apprise them of national intentions, and that could easily continue without giving these men national status. We know that the Chairman of the Board has a private plane so that he can conduct his peregrinations over the coalfields. Will each of the new members have a plane as well, so that he can commute in the way I have indicated? It seems a fantastic proposal.
What added responsibility has arisen in this declining industry to merit five more members on the Board? What does the Minister think will be the psychological effect of this proposal on the men in the coal industry? What is a man rendered unemployed, and probably walking the streets to find a job, to think of this proposal to create fresh Board members? Inevitably, this proposal, that will inevitably outdo Parkinson in creating more jobs, means that the area chairmen when they are absent at London meetings will have to delegate responsibilities to someone else.
I have always been opposed to the inclusion of part-time members of the Board. Part-time membership has provided a repository for retired trade union members and indigent businessmen. The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) spoke of nepotism and "jobs for the boys". Part-time members of the Board attending six or eight meetings a year cannot be adequately apprised of what is going on to take a proper part in those meetings. A Board of 16 would be too unwieldly for control. I hope that even at this late stage the Minister will think again about this derogatory proposal to spend more money and to increase the personnel of the Board.

Mr. Marsh: I hope that it will be of assistance to the Committee if I were to intervene at this stage to explain my reasons for this proposal. I quite understand the arguments put forward against

it. They are perfectly logical and are shared by many people. This idea was not "Fleck", but "Marsh". Despite the run down, this is still a very big industry—

Mr. Neal: It was before.

Mr. Marsh: Will my hon. Friend allow me to continue?
It is still very large by British and international standards. A Board of this size is not abnormal. The Steel Corporation has 16 members on the Board, the N.C.B. will have 16 if this proposal is agreed to. The Gas Council has 16 and the Electricity Council has 20. I.C.I. has a board of 24. A board of this size is not spectacularly large, although that is no reason for making a small board bigger.
The reason I came to this conclusion is that, unlike most of the nationalised industries, this industry has not a federal structure. The sole top management is contained in Hobart House and it has no regional autonomy as the more federalised industries have. Already, there are very serious problems which have a regional flavour about them in the industry. It is not possible to compare the problems of the central coalfields with those of Wales and Scotland. They are almost totally different mining industries with totally different problems.
We are trying to produce a system whereby we shall have closer contact and liaison with the chairmen of the regional councils. We have 17 area boards responsible directly with the divisional chairmen between and with no real status under the new set-up. It is very doubtful whether a regional chairman has any powers over the area chairmen. The 17 areas report direct to Hobart House to a Board which is a functional one. It has a member for industrial relations, one for production, one for science and so on. I do not think the production director, the marketing director or the science director can be properly cognisant of the 17 area reports received every month.
The purpose would, therefore, be to ensure that in addition to the functional members there were on the National Board, say, four regional members with direct responsibility, as a kind of one-man microcosm of the Board as a whole, to provide the link between the regions and the Board and to be present at Board


meetings as members of it. There is a great difference between attending a meeting of the Board as an official invited to sit in and joining on equal batting terms with the other members.
With the very real difficulties that the industry faces—some of the biggest arising from regional problems, which differ from region to region—I thought there was an advantage in having regional directors who were full-time members of the Board and have full knowledge of its functional activities within their regions. We have this in the British Steel Corporation, which is proving very successful. For example, the impact of the policies of the production director at Hobart House differs according to the various regions in which they are implemented. Therefore, I thought it right to have regional representation at that level.
It may be felt that the proposal provides jobs for the boys, and that I was attracted to the idea of having patronage over the Coal Board which would enable me to control it. That is something which I sometimes think about in the early hours of the morning, but I do not think that any Minister of Power is likely to do that with these appointments.
Some people think that this produces new jobs, but if region it directors are appointed there is then no job for the existing divisional chairmen. They would be cut out, and the areas would be responsible to their own particular regional chairman. It would not be a question of appointing more people in total.
Perhaps one should not get into an argument on salaries, and I do not express a view one way or the other. Within the nationalised industries there is little difference between the salary of a divisional chairman and that of a Board member. It is open to argument whether that should be so. Therefore, there will be no increase in the total numbers employed, and extra cash received by individuals will be so minimal as to have no meaning.
The Committee must decide whether there is enough in the argument for having the funnelling of the 17 areas into the four regional directors, who will be central and on equal terms with the other functional members of the Board. I do not believe that functional directors can

absorb 17 area reports in a meaningful way every month.
5.45 a.m.
It is crucial for this exercise that the proposals of the 17 areas should make an impact on the Board at every level. It seems to me that having those four people on the Board and cutting out the divisional chairmen is the best way of achieving this. I do not propose to die in the last ditch on the proposals; it is a matter of opinion. But given the importance and the implications of the job, this is probably better than the existing method.

Mr. McGuire: One of the worst features of the proposal to increase the number of whole-time members of the Board to 13 and the part-time members to three will be its effect in the coalfields. One constantly meets the argument there that at local and divisional level—and now at national level, which has never previously been the case—the Board seems to be too keen on over-manning in what the chaps I used to work with in the pit call the white collar trade. I must not be too disparaging, because I know that my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) is an eloquent spokesman for colliery managers and other white collar workers.
This will be a damaging indictment of the Board because at a time when the industry is contracting, we are increasing the number of people on the Board. It will have a very bad effect and what the Minister has said has not reassured me that there is any need to alter the position of the five divisional chairmen. It seems that one of the motives for it is to give them a sinecure against possible redundancy. In my time with the Board it has been altered several times. To argue that the divisional chairmen are sort of emasculated men who can do little to influence events and relay opinions to the Board is not sufficient. If they cannot, we need to alter the structure.
I want to direct the attention of the Committee to the position of the part-time members. We want to have men, either as part-time members, or as full-time members, who can contribute something to the efficiency of the Coal Board. We have only two part-time members at present, although I know that if we accept the Government's proposal we


will have the chance to increase the number to three.
We have Cecil King. We all know that that lad knows all about coal. He owns the Daily Mirror, but he certainly knows all about getting coal. He has done some lashing on in his time in the pit and has got plenty of coal, the hard way. I do not know quite how he was selected. Obviously, it was not because of his detailed knowledge of the industry. I do not know whether he makes a telling contribution to the Board's activities.

Mr. Marsh: My hon. Friend should not be too disparaging about Mr. King. He was responsible for providing 11 million copies of an article in favour of a coal-power station at Seaton Carew.

Mr. McGuire: My right hon. Friend is clairvoyant. I was coming to that. I was about to ask if he was appointed because he is well known to be sympathetic towards conventional power stations. If anyone wants to advocate an argument through a daily newspaper his is the best newspaper, because it has the highest circulation. If Mr. Cecil King and the Daily Mirror advocate the building of conventional power stations—and they can do it more eruditely than I can—this is a good reason for keeping him on the Board, as long as he continues to advocate common-sense policies.
The other part-time member is a professor, Professor Kahn. There is a place in this society for professors, but I believe that this House has learnt to its cost that people place too much credence on what professors say. They all say at the same time very different things. If we laid economists, statisticians and professors end to end they would still not reach agreement. I do not know what branch of economics Professor Kahn specialises in. No doubt he brings a powerful intellect to the activities of the Board.
This proposal will be seen by the ordinary miner in the sense that, however erudite and however wide the activities Cecil King engages in, these are not the qualifications required of a part-time member of the Board. My right hon. Friend should seek to appoint as a part-time member someone recognised to have detailed knowledge of the day-to-day

workings of the Board and who knows something of the fears and aspirations of the ordinary man in the coal fields. A person of such qualities on the Board would go a long way to reinforcing the argument that part-time members have a particular contribution to make.
I understand that these members will be in addition to the Chairman. We have a deputy chairman and Mr. Arthur John, Director of Finance. There is also Bill Webber, Director of Industrial Relations; Mr. Grainger, the Member for Science, and Mr. Sheppard, the Member for Production. I believe that two whole-time posts are vacant—those of the marketing and staff managers. I wonder whether the staff manager appointment could be dealt with by the spokesman for C.O.S.A. If the men in the industry are to be reassured that their interests will still be safeguarded by the Board, it would be better to see a man of the qualities I have described appointed to overall charge of staff policy.
I do not quite accept the argument that we should seek to put these five divisional chairmen on the Board—these poor souls who are not in a position, apparently, to be able to relay information, perhaps because no one takes any notice of them. Apparently, they do not know whether they have power over the area boards. That is a fantastic and ridiculous argument.
One may ask why the Board is being reconstituted in this way, why the old divisions have been carved up and why the title of divisional chairman is being retained. If it is asked, "What does the divisional chairman do and does anyone take notice of him when he is doing it?" the answer, apparently, is that the new idea is to make him a full-time member of the Board. To dispel any accusation that we are creating "jobs for the boys" while doing away with the men who produce the coal, we should not be consolidating and increasing the jobs of those who do not produce. The way to do that, if those divisional chairmen have no powers, is to give them the powers. I cannot accept that they do not have the powers. I cannot accept that when they know the problems in the regions, to make them effective they have to be planted on to the N.C.B. as whole-time members to make a different cast. That does not make common sense.
I ask my right hon. Friend not to pursue the question of having the extra members, certainly not in this form. I have no objection to appointing, as we should have already, three part-time members. Let us appoint someone who is recognised as knowing something about the grass roots of the mining industry so that when men go to the rostrum at trade union conferences and ask what the Union is doing, the divisional secretaries and presidents of the National Union of Mineworkers can explain the policy and show that there have not been jobs for the boys. The object of the exercise is to make a stronger and better Board in the interest of everybody concerned and to dispel the argument that it is a case of jobs for the boys.

Mr. David Griffiths: I am astounded that whoever has advised my right hon. Friend the Minister has told him that after 20 years' experience the Board needs to be increased from 11 to 16 members. The industry is contracting with pits closing all over the country, and we are now adding more fuel to the fire. We already have a demoralised, disgruntled mining community. What will happen when the rank and file get to know that the Board is being increased to 16 members?
It is a question not only of the Board at Hobart House. It is a question of overloading from the area general managers down to the shot firers and deputies. My right hon. Friend should go to the mining areas to ascertain the feelings of the men. Those advising my right hon. Friend do not know much about the ramifications of the mining industry. Those with experience of the pits will realise the antagonism that will confront them. I implore you, Mr. Minister, to reconsider this—

The Temporary Chairman (Mr. Grant-Ferris): Order. The hon. Member must address me, not the Minister.

Mr. Griffiths: I beg pardon, Mr. Grant-Ferris.
I ask my right hon. Friend to look again at the position. I visualise that immense difficulties will confront him. If we are to have an increase in the Board at Hobart House and to displace district chairmen, there will be difficulty in having power in negotiations. There will be a prolongation of negotiations, causing irrit-

ability and bad temper. I am sure that anyone who knows anything about the industry will deplore the increase in the membership of the Board from 11 to 16.

6.0 a.m.

Mr. Adam Hunter: I shall never cease to wonder how at this time it should be proposed that the numbers on the Board, part-time and full-time, should be increased. I have in mind the considerations already put by my hon. Friends prior to my taking my feet. First, of course, is the fact that the industry is contracting. I think that this is the nub of the question.
There is in the industry an institution corresponding with the Coal Board, and that is the National Union of Mineworkers. I will take my own area, with which I am best acquainted. In the Counties of Fife, Clackmannan and Stirling we had three full-time trade union members; we had an office at which everyone could call. Now, at this time, with the Scottish figure of employed manpower having gone down from 80,000 to 40,000, we find there is no need for any trade union office, no use for any trade union official, in the County of Fife, my own county, or Stirling County. People have now to go to Edinburgh, where the Coal Board's Scottish headquarters are.
Ten years ago the number of men employed in the coal-mining industry in the United Kingdom was about 700,000. Now we have only 390,000. In my area—I suppose this will be happening in many other areas of the United Kingdom—we have had complete rationalisation of our industry. Many pits have been closed; most of the administrative staff have moved from the counties I have mentioned to Edinburgh; we have workshops now completely rationalised; instead of two large workshops we have only one.
It is a very serious question that we could have 10 years ago a Divisional Chairman, along with a group of the National Union of Mineworkers, with complete control of the Scottish Division, and that now we find that, with this very much reduced manpower, we are to change the whole set-up. I think that there is something very seriously wrong with the Minister when this proposal is put forward at this time.

Mr. Lane: May I, briefly, support my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor), Who


moved this Amendment so persuasively on behalf of his absent hon. Friends? All through the night we have been discussing the problems of adjustment of a great national industry. I also have a personal problem of adjustment, if hon. Members will allow me to mention it, as this is the first time I have taken part in a coal debate. Only two years ago I was working for an international oil company. Obviously, whereas previously I looked at power questions through the eyes of an oil company employee, I have now to try to take a broader view as a member of this Committee, and I will do my best to do that with fairness and objectivity.
Although I have never lived in a mining community I do have some idea of the anxiety which is felt at the present time in the mining communities and by hon. Members who here represent them. In Cambridge, as hon. Members know, we have no coal mines. We have a good many consumers; we have a great many taxpayers. Of course, in this, as in all the other questions we have been discussing tonight, it is a matter of striking a balance between these interests, and I suggest that on this Clause and the question of the size of the Coal Board the Minister has to strike a balance.
I must say that I am not yet fully convinced by his argument, even by his fuller explanation he gave this morning, fuller than that he gave on Second Reading, of his proposal. Has he considered the bare statistics of this matter? We understand that, on the best estimates, coal output is likely to fall by about 15 per cent. by 1971, and, if my arithmetic is correct, he is envisaging that the Board's membership may go up even faster than that decline—by no less than 50 per cent. Would he have a short word, before he makes his mind up, with the Minister of Transport?
It is not often that we on this side of the Committee approve of something that the Minister of Transport proposes to do, but I understand that she is proposing to cut down the size of the British Railways Board. It would be well if the Minister of Power had a word with his right hon. Friend before finally making up his mind. I was surprised when in his speech a few minutes ago he did not deal with the point, put by his

hon. Friends much more forcefully than I can put it, about the effect of this proposal on the morale in the coal fields.
Will the right hon. Gentleman think further about this subject? He and the Parliamentary Secretary have said "No" with varying degrees of charm to every Amendment moved tonight. Will the right hon. Gentleman now celebrate the nearness of the dawn by accepting this very modest Amendment?

Mr. Swain: I am interested in the Amendment and in the composition of the Coal Board in general. Since 1957, the industry has run down from 780,000 men to about 385,000 and that has been done with very little trouble for the labour relations within the industry. I must give the management at all levels and the National Union of Mineworkers at all levels credit for this magnificent exercise in industrial relations. But this Clause is the straw which will break the camel's back.
Last Saturday night I was in my local having a pint at somebody else's expense when I was told that at a pit in the area where I lived and where there used to be one under-manager and three over-men there were now two under-managers and nine overmen, although only 410 men were now employed in the pit. It appears that the Board has to increase the number of its staff in proportion to the decrease in the number of men employed in the industry.
During this week I have put 17 Questions to the Minister of Power to conduct an inquiry into this subject. I have found that the manpower in the industry is hopelessly out of balance, because there are far more administrative workers per 1,000 workers employed than there were only five years ago. I contend that the Coal Board does not require any more members.
I was under the impression that when the industry was reorganised into areas, divisional chairmen would be appointed to the areas to undertake functional jobs, and with that I entirely agree. But if people have been appointed to these functional jobs in the areas, then I recommend my right hon. Friend to have a redundancy scheme for these four divisional chairmen, because there does not appear to be any function in the divisions for them, and I cannot see any


function for them at national level. We have managed with a Board of eight and part-time members.
My hon. Friend the Member for Bolsover (Mr. Neal) knows perfectly well that when the safety regulations were amended, the added responsibility of those regulations was used as a subterfuge to appoint certain part-time members. What is to be the subterfuge for the appointment of these five new members? I have heard some whispering on the Government Front Bench and I hope that it is repeated aloud so that we can all understand what is being said.
I hope and trust that the Minister will tell the House this. I hope that the Board will not be extended by one. I do not think it is needed. It will cause more trouble in the coalfields than my right hon. Friend or most hon. Members appreciate. We live in the mining villages of Derbyshire, Yorkshire and other mining areas and we know this. We want to help the Minister and the Coal Board in maintaining the excellent relations between the Coal Board and the men which have existed for years.
Not many weeks ago, I remind my right hon. Friend, we had a bitter experience at Hamilton, mainly because the mining community were suspicious of what our very proud Government were doing. We have to do everything in our power to prevent such tragedies to the community as nationalists taking over, as happened in Scotland and Wales. I am sure that the Minister will see the wisdom not only of accepting the Amendment, because the commonsense thing would have been to leave the figure at 8 per cent., but of giving a figure between 8 and 16 per cent.

Mrs. Thatcher: It seems that we are almost having a "Clause stand part" debate on the Amendment. I agree with a number of hon. Gentlemen that there should not be a single increase in the membership of the Coal Board. In the arguments he put forward for the Clause, the hon. Member said that so many problems of the Board had a regional flavour that they were quite distinct and that the regional flavour was not represented on the Board. If that is his argument, he should not be asking for an increase, but for devolution to regional level to deal with these problems.
In private industry, where there are quite large boards, one finds a regional structure with considerable powers operated at the regions. The answer to his argument for regional flavour is more power at regional level. In reading the Report, it seems to me that he has abolished the nearest thing to a region, the division. One cannot have it both ways, to abolish the division, put it forward as a great advance and then say that there is a need for more regional representation at Board level because problems have a regional flavour.
The Board operates on a functional basis and it is said that none of the members can be expected to read the reports from the regions each month. Even if regional members were put on, functional members would not be freed from the job, and it would be their job to read every report.
This argument appals me, because it would lead to a disaster of the kind we had when one director just plainly did not know his job. The Minister is trying to have a board operate functionally and regionally. He will have to make up his mind what he wants. I suspect that the right hon. Gentleman is admitting that the present Board does not know its job and cannot do the job allotted to it. This is not a reason for adding four or five more members; it is a reason for looking at the present structure and membership of the Board. Before the Committee agrees to the Clause standing part of the Bill, which I hope it will not do, I trust that the right hon. Gentleman will go back and think again along the lines of the advice which has been offered to him during the debate.

6.15 a.m.

Mr. Marsh: The problem which I have, apart from the hour of the morning, is an inability to withstand the pressure of my colleagues and that of hon. Gentlemen opposite on an issue about which they have strong feelings. As has happened so frequently in my experience, I do not seem to have any supporters. I am sure that my hon. Friend the Parliamentary Secretary would support me were he here. This is clearly something which is not acceptable to either side of the Committee.
I take the hon. Lady's point. I am not happy with things as they are in this


relationship. There is a missing link between the area and Board levels. I ask the Committee to accept that I am prepared to consider, in another place, accepting one of these Amendments. I undertake seriously to examine the matter, but I would like time to work out what the alternative is to the original suggestion which I put up. It might be necessary not to proceed with any further appointments, or to proceed with one of the Amendments. The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) suggested three members instead of five.
It is clear that my orginal proposal is not acceptable to the Committee. I would like an opportunity to look at this in another place so that I have time in which to decide what to accept, and to see what sort of structure should be considered as an alternative.

Mr. Edward M. Taylor: I am sure that the Committee is delighted to hear the Minister taking such a reasonable attitude. He sensed the feeling of the Committee. I wish that more Ministers would adopt his attitude in similar circumstances.
I hope that the right hon. Gentleman appreciates that there is an equally strong feeling about the high price of gas in Scotland.
In view of the Minister's statesmanlike and helpful comments I have much pleasure in begging leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 7 ordered to stand part of the Bill.

Clauses 8 and 9 ordered to stand part of the Bill.

Schedule agreed to.

Bill reported, without Amendment.

Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 55 (Third Reading), and agreed to.

Bill accordingly read the Third time, and passed.

ADJOURNMENT

Resolved,
That this House do now adjourn.—[Mr.
Varley.]

Adjourned accordingly at twenty minutes past Six o'clock, a.m.